<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES ACT OF 1934
Date of Report July 24, 1996
................................................................
UNR Industries, Inc.
...............................................................................
(Exact name of registrant as specified in its charter)
Delaware 1-8009 36-3060977
...............................................................................
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
332 South Michigan Avenue, Chicago, Illinois 60604-4385
...............................................................................
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, include area code 312.341.1234
.............................
<PAGE>
ITEM 5. OTHER EVENTS.
The registrant has entered into agreements providing for the sale of
substantially all of the assets of its Leavitt and Commercial Products
Divisions, copies of which are filed herewith as Exhibits 1 and 2, respectively.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
1. Sale and Purchase Agreement Dated May 15, 1996 among Chase Brass
Industries, Inc., Leavitt Structural Tubing Co. and UNR Industries,
Inc., together with Amendment No. 1 Dated July 1, 1996.
Sale and Purchase Agreement Dated June 18, 1996 between Richards Capital Fund,
L.P. and UNR Industries, Inc.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
UNR INDUSTRIES, INC.
July 24, 1996 By: /s/ VICTOR E. GRIMM
-------------------------
Victor E. Grimm
Vice President and Secretary
<PAGE>
EXHIBIT 1
SALE AND PURCHASE AGREEMENT
DATED MAY 15, 1996
AMONG
CHASE BRASS INDUSTRIES, INC.,
LEAVITT STRUCTURAL TUBING CO.
AND
UNR INDUSTRIES, INC.
<PAGE>
TABLE OF CONTENTS
PAGE
1.0 Purchase and Sale of Shares and Assets. . . . . . . . . . . . . . . . 1
1.1 The Shares. . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Purchased Assets . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . 3
2.0 Purchase Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.1 Amount of the Purchase Price. . . . . . . . . . . . . . . . . 4
2.2 Allocation of the Purchase Price among the Shares and
Purchased Assets . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Assumed Liabilities . . . . . . . . . . . . . . . . . . . . . 4
2.4 Excluded Liabilities. . . . . . . . . . . . . . . . . . . . . 6
3.0 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.1 Time and Place of the Closing . . . . . . . . . . . . . . . . 8
3.2 Procedure at the Closing . . . . . . . . . . . . . . . . . . 8
3.3 Effective Time. . . . . . . . . . . . . . . . . . . . . . . .10
3.4 Adjustment of Purchase Price. . . . . . . . . . . . . . . . .10
3.5 Accounts Receivable Adjustment. . . . . . . . . . . . . . . .13
3.6 Non-Assignable Purchased Contracts. . . . . . . . . . . . . .15
4.0 Representations and Warranties of the Seller . . . . . . . . . . . .16
4.1 Organization, Power and Authority of the Seller . . . . . . .16
4.2 Organization, Power, Authority and Assets and Properties
of Holco . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.3 Capital Stock of the Companies . . . . . . . . . . . . . . . 17
4.4 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . 17
4.5 Status and Effect of Delivery of the Shares . . . . . . . . 17
i
<PAGE>
PAGE
4.6 Financial Summaries . . . . . . . . . . . . . . . . . . . . 17
4.7 Liabilities of the Seller and the Companies . . . . . . . . 18
4.8 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . 18
4.9 Real Estate of the Seller and the Companies . . . . . . . . 20
4.10 Good Title to the Purchased Assets . . . . . . . . . . . . . 21
4.11 Licenses and Permits . . . . . . . . . . . . . . . . . . . . 21
4.12 Proprietary Rights . . . . . . . . . . . . . . . . . . . . . 22
4.13 Adequacy of the Purchased Assets . . . . . . . . . . . . . . 22
4.14 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.15 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.16 No Material Adverse Change . . . . . . . . . . . . . . . . . 23
4.17 Absence of Certain Acts or Events . . . . . . . . . . . . . 23
4.18 Compliance with Laws . . . . . . . . . . . . . . . . . . . . 23
4.19 Environmental Matters . . . . . . . . . . . . . . . . . . . 24
4.20 Employee Matters; Labor Relations . . . . . . . . . . . . . 25
4.21 Employee Benefits . . . . . . . . . . . . . . . . . . . . . 26
4.22 Product Recalls . . . . . . . . . . . . . . . . . . . . . . 27
4.23 Absence of Defaults . . . . . . . . . . . . . . . . . . . . 27
4.24 Due Authorization; Binding Obligation . . . . . . . . . . . 29
4.24.A Intercompany Transactions . . . . . . . . . . . . . . . . . 29
4.24.B Inventories . . . . . . . . . . . . . . . . . . . . . . . . 29
4.24.C Business Relations . . . . . . . . . . . . . . . . . . . . . 30
4.24.D Product Warranties . . . . . . . . .. . . . . . . . . . . . 30
4.24.E Location of Inventory and Assets . . . . . . . . . . . . . 30
4.24.F No Production of Asbestos-Containing Products . . . . . . . 30
ii
<PAGE>
PAGE
4.24G Final Sales. . . . . . . . . . . . . . . . . . . . . . . . . 30
4.25 Limitations on Seller's Representations and Warranties . . . 30
4.26 True and Complete Copies . . . . . . . . . . . . . . . . . . 31
4.27 Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.28 Rohn Products. . . . . . . . . . . . . . . . . . . . . . . . 31
5.0 Representations and Warranties of the Purchaser. . . . . . . . . . . 31
5.1 Organization, Power and Authority of the Purchaser . . . . . 31
5.2 Due Authorization; Binding Obligation. . . . . . . . . . . . 31
5.3 Purchase for Investment. . . . . . . . . . . . . . . . . . . 31
5.4 Investigation by Purchaser . . . . . . . . . . . . . . . . . 32
5.5 Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.6 Financial Resources. . . . . . . . . . . . . . . . . . . . . 32
6.0 Additional Covenants of the Parties. . . . . . . . . . . . . . . . . 32
6.1 All Reasonable Efforts . . . . . . . . . . . . . . . . . . . 32
6.1.A HSR Filings. . . . . . . . . . . . . . . . . . . . . . . . . 32
6.2 Conduct of Business Pending the Closing. . . . . . . . . . . 32
6.3 Access to the Properties and Records of the Businesses . . . 34
6.4 No Disclosure. . . . . . . . . . . . . . . . . . . . . . . . 34
6.5 Bulk Sales Law . . . . . . . . . . . . . . . . . . . . . . . 35
6.6 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.7 Employee Matters . . . . . . . . . . . . . . . . . . . . . . 35
6.8 Obligation to Notify . . . . . . . . . . . . . . . . . . . . 39
6.9 Use of UNR . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.10 Other Agreements . . . . . . . . . . . . . . . . . . . . . . 39
7.0 Conditions to the Obligation of the Purchaser . . . . . . . . . . . 40
iii
<PAGE>
Page
7.1 Accuracy of the Seller's Representations and Warranties and
Compliance by the Seller with Its Obligations. . . . . . . . 40
7.2 Certified Resolutions. . . . . . . . . . . . . . . . . . . . 40
7.3 Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . 40
7.4 Receipt of Necessary Consents . . . . . . . . . . . . . . . 40
7.5 Title Insurance. . . . . . . . . . . . . . . . . . . . . . . 41
7.6 No Adverse Order . . . . . . . . . . . . . . . . . . . . . . 41
7.7 No Adverse Change. . . . . . . . . . . . . . . . . . . . . . 41
8.0 Conditions to Obligations of the Seller . . . . . . . . . . . . . . 41
8.1 Accuracy of Representations and Warranties and Compliance with
Obligations. . . . . . . . . . . . . . . . . . . . . . . . . 41
8.2 Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . 41
8.3 Certified Resolutions. . . . . . . . . . . . . . . . . . . . 42
8.4 No Adverse Order . . . . . . . . . . . . . . . . . . . . . . 42
8.5 HSR Act. . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.0 Certain Actions After the Closing . . . . . . . . . . . . . . . . . 42
9.1 Purchaser to Act as Agent for Seller . . . . . . . . . . . . 42
9.2 Purchaser Appointed Attorney for Seller. . . . . . . . . . . 42
10.0 Product Warranty and Liability Claims . . . . . . . . . . . . . . . 42
10.1 Product Warranty and Liability Claims; Cooperation in
Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 42
11.0 Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
11.1 Brokers' Commission. . . . . . . . . . . . . . . . . . . . . 43
11.2 Amendment and Modification . . . . . . . . . . . . . . . . . 43
11.3 Termination. . . . . . . . . . . . . . . . . . . . . . . . . 43
11.3.A Confidentiality. . . . . . . . . . . . . . . . . . . . . . . 44
11.4 Binding Effect; Assignment . . . . . . . . . . . . . . . . . 45
iv
<PAGE>
PAGE
11.5 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . 46
11.6 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . 46
11.7 Execution in Counterpart . . . . . . . . . . . . . . . . . . 46
11.8 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 46
11.9 Governing Law; Consent to Jurisdiction; Waiver of Jury Right 47
11.10 Limitation on Rights of Other Persons. . . . . . . . . . . . 47
11.11 Severability . . . . . . . . . . . . . . . . . . . . . . . . 47
11.12 Termination of Representations, Warranties and Agreements. . 48
11.13 Certain Definitions. . . . . . . . . . . . . . . . . . . . . 48
12.0 Survival of Representations and Warranties . . . . . . . . . . . . . 48
12.1 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . 48
12.2 Pursuit of Claims. . . . . . . . . . . . . . . . . . . . . . 49
13.0 Indemnification and Procedures . . . . . . . . . . . . . . . . . . . 49
13.1 Indemnification. . . . . . . . . . . . . . . . . . . . . . . 49
13.2 Indemnification Procedures . . . . . . . . . . . . . . . . . 51
13.3 Certain Environmental Matters. . . . . . . . . . . . . . . . 53
13.4 Claims Limitations . . . . . . . . . . . . . . . . . . . . . 55
13.5 Tax Indemnification. . . . . . . . . . . . . . . . . . . . . 55
14.0 Exclusive Dealing and Termination Fee . . . . . . . . . . . . . . . 57
14.1 Exclusive Dealing . . . . . . . . . . . . . . . . . . . . . 57
14.2 Termination Payment. . . . . . . . . . . . . . . . . . . . . 58
15.0 Post-Closing Tax Matters . . . . . . . . . . . . . . . . . . . . . . 59
15.1 Seller Tax Returns . . . . . . . . . . . . . . . . . . . . . 59
15.2 Purchaser Tax Returns. . . . . . . . . . . . . . . . . . . . 59
15.3 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . 59
v
<PAGE>
PAGE
15.4 Section 338 Election . . . . . . . . . . . . . . . . . . . . 60
vi
<PAGE>
SCHEDULES
Schedule 1.2.6 Purchased Contracts
Schedule 1.2.8 Purchased Proprietary Rights and Proprietary Rights
of the Companies
Schedule 2.2 Allocation of Purchase Price
Schedule 3.4 Example of Net Assets Calculation
Schedule 3.5 C.O.D. Customers
Schedule 4.3 Capital Stock of the Companies
Schedule 4.6 Financial Summaries
Schedule 4.9 Real Estate
Schedule 4.10 Mortgages, Liens and Other Encumbrances
Schedule 4.11 Licenses and Permits
Schedule 4.15 Litigation and Claims
Schedule 4.17 Absence of Certain Acts or Events
Schedule 4.18 Compliance with Laws
Schedule 4.19 Environmental Matters
Schedule 4.20 Employee Matters; Labor Relations
Schedule 4.21 Employee Benefits
Schedule 4.24.E Location of Inventory and Assets
Schedule 4.25 Individuals with Knowledge
Schedule 6.7.1 Sche dule of Salaried Employees
Schedule 6.7.2 Benefits Plans for Continued Employees
Schedule 6.7.7 Collective Bargaining Agreements
vii
<PAGE>
SALE AND PURCHASE AGREEMENT
This Sale and Purchase Agreement (the "Agreement") is made and entered into
this 15th day of May, 1996 by and among the following parties: UNR Industries,
Inc., a Delaware corporation ("UNR"), Leavitt Structural Tubing Co., a Delaware
corporation ("Leavitt Structural"), and Chase Brass Industries, Inc., a Delaware
corporation (the "Purchaser"). Unless the context otherwise requires, UNR and
Leavitt Structural herein shall be referred to collectively as the "Seller."
RECITALS
Seller desires to sell, convey, transfer and assign to the Purchaser, and
the Purchaser desires to purchase from Seller, the assets, properties and
business of the Leavitt division of UNR, including substantially all of the
assets and properties of Leavitt Structural and all of the issued and
outstanding shares of capital stock of Holco Corporation, an Illinois
corporation and a wholly-owned subsidiary of Leavitt Structural ("Holco;" Holco
and Leavitt Structural are herein sometimes referred to collectively as the
"Companies"), for a purchase price consisting of cash and the assumption by the
Purchaser of certain liabilities of the Seller, all as herein provided and on
the terms and conditions hereinafter set forth. The assets, properties and
businesses of the Leavitt division and Leavitt Structural and Holco are herein
sometimes referred to collectively as the "Businesses."
COVENANTS
In consideration of the mutual representations, warranties and covenants
and subject to the conditions herein contained, the parties hereto agree as
follows:
1.0 PURCHASE AND SALE OF SHARES AND ASSETS
1.1 THE SHARES. Leavitt Structural agrees to and will sell, transfer,
assign and deliver to the Purchaser at the Closing, free and clear of all liens,
pledges, encumbrances, claims and equitable interests of every kind, and the
Purchaser agrees to and will purchase and accept from Leavitt Structural, on the
terms and subject to the conditions set forth in this Agreement, all of the
issued and outstanding shares of capital stock of Holco (the "Shares").
1.2 PURCHASED ASSETS. The Seller agrees to and will sell, convey,
transfer, assign and deliver to the Purchaser at the Closing (as hereinafter
defined), free and clear of all liens, mortgages, pledges, encumbrances and
charges of every kind (except liens incident to the liabilities and obligations
which the Purchaser has expressly agreed in Section 2.3 hereof to assume), on
the terms and subject to the conditions set forth in this Agreement, all of the
properties, business and assets of the Businesses of every kind and description,
real, personal and mixed, tangible and intangible, wherever located (except
those assets of the Businesses which are specifically excluded from this sale by
Section 1.3 hereof and those which are already owned by Holco) as they shall
exist at the Closing Date (as hereinafter defined) (collectively, the "Purchased
Assets"). Without limiting the generality of the foregoing, the Purchased
Assets shall include the following:
<PAGE>
1.2.1 all right, title and interest of the Seller and UNR
Realty, Inc., an Illinois corporation ("UNR Realty"), in and to the
real property described in Schedule 4.9 hereto, including the real
property, buildings, facilities and other improvements thereon, and
all easements, rights of way and other appurtenances thereto (the
"Purchased Real Estate");
1.2.2 all of the interests of and the rights and benefits
accruing to the Seller as lessee of the real properties (the
"Purchased Leasehold Premises") identified on Schedule 4.9 hereto (the
"Purchased Leasehold Rights");
1.2.3 all machinery, vehicles, equipment, tools, spare
parts, construction in progress, computer equipment and computer
programs, furniture and fixtures and other material fixed assets owned
by the Seller and located on the Purchased Real Estate, the Purchased
Leasehold Premises or elsewhere, that are used primarily in the
Businesses (the "Purchased Fixed Assets");
1.2.4 all inventories of the Seller relating to the
Businesses as of March 31, 1996 as are included in the March 1996
Statement constituting a part of Schedule 4.6 hereto, less such items
of inventory as are consumed or sold, plus such items as are added to
inventory, in the ordinary course of business between March 31, 1996
and the Closing (the "Purchased Inventory");
1.2.5 all receivables of the Seller (other than intercompany
receivables) relating to the Businesses arising from sales of
inventory in the ordinary course of business as of March 31, 1996 as
are included in the March 1996 Statement constituting a part of
Schedule 4.6 hereto, less such receivables as are paid, plus such
receivables as are created, in the ordinary course of business between
March 31, 1996 and the Closing (the "Purchased Receivables");
1.2.6 all of the rights and benefits accruing to the Seller
under or pursuant to the receivables, contracts, agreements,
arrangements, commitments, open purchase orders for capital equipment
and blanket purchase orders identified in Schedule 1.2.6 (the
"Purchased Contracts");
1.2.7 all operating data and records of the Seller related
to the Businesses, including customer lists, financial, accounting and
credit records, correspondence, budgets and other similar documents
and records (the "Purchased Records");
1.2.8 except as provided in Section 1.3.3, all of the
proprietary rights of Seller relating to the Businesses, including
without limitation, all patents, patent applications, patent licenses,
trademarks, trade names and registrations and applications therefor,
trade secrets, technology, know-how, formulae, designs and drawings,
computer software, slogans, copyrights, processes and other similar
intangible property and rights relating to the Businesses, as set
forth on Schedule 1.2.8 (the "Purchased Proprietary Rights");
2
<PAGE>
1.2.9 all prepaid and deferred items of the Seller existing
on the Closing Date with respect to the Businesses, including prepaid
rentals, taxes and unbilled charges and deposits relating to the
operations of the Businesses;
1.2.10 all of Seller's right, title and interest in and to
the goodwill of the Seller relating to the Businesses; and
1.2.11 all of Leavitt Structural's rights under and pursuant
to that certain Stock Purchase Agreement dated as of March 31, 1991,
among Leavitt Structural, Hoogovens Groep B.V. and Holco.
To the extent any affiliate of Seller (other than Holco) holds any interest
in or to any Purchased Assets or any other properties or assets used primarily
in the operation of the Businesses, Seller will cause such affiliate to sell,
convey, transfer, assign and deliver to the Purchaser at the Closing, free and
clear of all liens, mortgages, pledges, encumbrances and charges of every kind
(except liens incident to the liabilities and obligations which the Purchaser
has expressly agreed in Section 2.3 hereof to assume), without any consideration
except as provided in this Agreement, all of such assets and properties to the
same extent and on the same terms and conditions as if such assets and
properties were held by Seller as of Closing.
1.3 EXCLUDED ASSETS. Notwithstanding Section 1.1, the Seller is not
selling or assigning to Purchaser, and the Purchased Assets shall not include,
any of the following (collectively, the "Excluded Assets"):
1.3.1 the Cash Consideration and Seller's other rights under
this Agreement;
1.3.2 cash and cash equivalents of the Seller relating to the
Businesses and any intercompany account payable to Seller or Holco or any
affiliate (as defined in Section 11.13);
1.3.3 trademarks, trade names, service marks and symbols
denoting or connoting UNR, including without limitation, UNR
Industries, Inc. and UNR;
1.3.4 subject to Section 6.3.3, any document containing
information about the Businesses which is combined or consolidated
with other information of Seller and any documents prepared by Seller
for the purpose of informing its management about the sale of the
Businesses or the Purchased Assets;
1.3.5 any interest of the Businesses in the Chicago Bulls
Tickets, Section 112, Row 3, Seats 5, 6, 7 and 8 (the "Chicago Bulls
Tickets"); and
1.3.6 all privileged communications, oral or written,
between Seller's officers, directors or employees and Seller's
attorneys (both inside and outside counsel), on any subject whatsoever
regarding any of the Businesses. If any documents are inadvertently
transferred to Purchaser which contain such privileged communications
or attorney work product, Purchaser shall immediately
3
<PAGE>
return such documents to the Seller upon discovery and such inadvertent
disclosure shall not be deemed to be a waiver of the attorney-client
privilege or work product doctrine.
2.0 PURCHASE PRICE
2.1 AMOUNT OF THE PURCHASE PRICE. As consideration for the Shares and
Purchased Assets (the "Purchase Price"), the Purchaser agrees, subject to the
terms, conditions and limitations set forth in this Agreement:
2.1.1 to pay to or for the account of the Seller, in the
manner specified in Section 3.2.5 hereof, $95,000,000.00 (the "Cash
Consideration"), subject to payment of the Discharge Obligations on
the Closing Date as provided in Section 3.2.6 hereof and subject to
adjustment as provided in Section 3.4 hereof; and
2.1.2 to assume and be responsible for the liabilities and
obligations of the Seller, to the extent provided in Section 2.3
hereof.
2.2 ALLOCATION OF THE PURCHASE PRICE AMONG THE SHARES AND PURCHASED
ASSETS. The Purchase Price shall be allocated among the Shares and each item or
class of the Purchased Assets as agreed by the parties hereto and as
specifically set forth in or determined pursuant to Schedule 2.2. The Seller
and the Purchaser agree that they will prepare and file their respective federal
and any state or local income tax returns based on such allocation of the
Purchase Price. The Seller and the Purchaser agree that they will prepare and
file any notices or other filings required pursuant to Section 1060 of the
Internal Revenue Code of 1986, as amended (the "Code") and that any such notices
or filings will be prepared based on such allocation of the Purchase Price.
2.3 ASSUMED LIABILITIES. The Purchaser agrees to and will at the
Closing assume and agree to pay, discharge and perform when lawfully due the
following liabilities, contracts, commitments and other obligations of the
Seller relating to the Businesses and the Purchased Assets (the "Assumed
Liabilities"):
2.3.1 all liabilities and obligations of Seller to the
extent accrued on the Closing Statement prepared in accordance with
Section 3.4 of this Agreement, subject to the payment of the Discharge
Obligations on the Closing Date as provided in Section 3.2.6 hereof;
2.3.2 all liabilities and obligations of Seller accruing
under or pursuant to the Purchased Contracts identified in Part II of
Schedule 1.2.6 hereto which are assigned to Purchaser on the Closing
Date and that either are accrued on the Closing Statement or relate to
any period or occurrence on or after the Closing Date;
2.3.3 all liabilities and obligations of Seller, in respect
of periods on or after the Closing Date, arising under or pursuant to
those contracts to which Seller is a party as of the Closing and that
(a) are not disclosed in Part II of Schedule 1.2.6 hereto, (b) were
entered into by Seller in the ordinary course of operations of
4
<PAGE>
the Businesses on terms and conditions consistent with the past practices
of the Businesses and (c) are assigned to Purchaser pursuant to this
Agreement on the Closing Date;
2.3.4 all liabilities and obligations of Seller, in respect
of periods on or after the Closing Date, accruing under or pursuant to
all purchase orders that (a) were entered into before the Closing by
Seller for the purchase by Seller of equipment or raw material to be
used, or services to be performed, in the operations of the Businesses
and (b) were entered into in the ordinary course of operations of the
Businesses on terms and conditions consistent with past practices of
the Businesses, including without limitation those purchase orders
listed in Parts III and IV of Section 1.2.6 hereto, to the extent the
assets or services to be provided pursuant to such purchase orders
have not been delivered or provided to Seller (or Holco) prior to the
Closing or, in the event such assets or services have been so
delivered or provided, to the extent the liability under such purchase
orders related to such assets or services is accrued on the Closing
Statement;
2.3.5 all liabilities and obligations of Seller, in respect
of periods on or after the Closing Date, to be performed under or
pursuant to the Madison County Leases (as hereinafter defined) listed
in Part II of Schedule 4.9 hereto relating to the Purchased Leasehold
Premises;
2.3.6 all liabilities and obligations of Seller accruing
under or pursuant to each Non-Assignable Purchased Contract from and
after the date on which all consents required for the transfer and
assignment of such Non-Assignable Purchased Contract have been
obtained and delivered to Purchaser as contemplated by Section 3.6.1
hereto;
2.3.7 solely to the extent expressly provided in Section
6.7.6 of this Agreement, all liabilities and obligations of Seller
under the Change of Control Agreements listed in Part I of Schedule
4.20 hereto;
2.3.8 all liabilities and obligations of Seller accruing
under the collective bargaining agreements listed on Schedule 6.7.7 of
this Agreement to the extent relating to (i) any periods on or after
the Closing Date and (ii)(a) accumulated benefit obligations under the
employee benefit plans listed in Part II of Schedule 6.7.2 hereto as
determined under SFAS 87 in excess of the fair market value of the
assets of each such plan ("Unfunded Pension Plan Obligations") as of
the Closing Date, determined in accordance with generally accepted
actuarial assumptions applied in a manner consistent with the
determination of the Unfunded Pension Plan Obligations as of December
31, 1995, and as reasonably agreed to by Purchaser (or, if such
determination as of December 31, 1995, was not made with respect to
any such plan, in a manner as reasonably agreed to by Seller and
Purchaser) and (b) all other amounts (including contributions),
relating to periods prior to the Closing Date, with respect to
pension, profit sharing, health and welfare and other benefit plans
required by such collective bargaining agreements
5
<PAGE>
to be provided for the benefit of employees of the Businesses ("Other
Unpaid Benefit Obligations"), but in each of cases (a) and (b) only to the
extent an accrual therefor is included in the Closing Statement; and
2.3.9 all monetary liabilities of Seller (other than for
borrowed money) related to the Businesses and arising in the ordinary
course of operations of the Businesses, but excluding any amounts
payable by Seller or Holco to any affiliate of Seller ("Residual
Liability"); provided, however, that the aggregate monetary liability
assumed by Purchaser under this Section 2.3.9 shall not exceed the
Residual Liability Cap (as hereinafter defined). For purposes of this
Section 2.3.9, the term "Residual Liability Cap" shall mean an amount
that, from time to time, will be equal to (i) $250,000, reduced by
(ii) any and all amounts that Purchaser is entitled pursuant to
Section 13.4.1 of this Agreement to apply toward the Deductible (as
hereinafter defined). Any and all reductions of the Residual Liability
Cap pursuant to this Section 2.3.9 will be deemed to occur
simultaneously with Purchaser becoming entitled, pursuant to Section
13.4.1 of this Agreement, to apply an amount towards the Deductible.
Notwithstanding the foregoing, Purchaser shall not assume any liability of
Seller arising as a result of any breach or any event, occurrence, condition or
act which, with the giving of notice, the lapse of time or both, would result in
a breach of any of the Purchased Contracts or other contracts or agreements
assigned to Purchaser pursuant to this Agreement to the extent such breach,
event, occurrence, condition or act existed prior to the Closing Date.
The Assumed Liabilities as provided in this Section 2.3 shall be subject to
such exclusions as set forth in Section 2.4 hereof and, except as expressly set
forth in this Section 2.3, Purchaser shall not assume or be deemed to have
assumed any liabilities or obligations of Seller.
2.4 EXCLUDED LIABILITIES. Anything to the contrary in Section 2.3
notwithstanding, the Assumed Liabilities shall exclude the following
liabilities, contracts, commitments and other obligations of the Seller (the
"Excluded Liabilities"):
2.4.1 Seller's obligations and any liabilities arising under
this Agreement;
2.4.2 any obligation of the Seller for federal, state, local
or foreign income or franchise tax liability (including interest and
penalties) of the Seller, Leavitt Structural or Holco arising from the
operation of the Businesses up to the Closing Date or arising out of
the sale by the Seller of the Shares and Purchased Assets pursuant
hereto;
2.4.3 any obligation imposed by law on the Seller for any
transfer, sales or other taxes, fees or levies imposed by any state or
other governmental entity on or arising out of the sale of the Shares
and Purchased Assets pursuant hereto;
2.4.4 any obligation of the Seller for expenses incurred in
connection with the sale of the Shares and Purchased Assets pursuant
hereto, including without
6
<PAGE>
limitation the fees and expenses of its counsel and independent auditors
and one-half of the cost of title insurance on the Purchased Real Estate;
2.4.5 any liability, contract, commitment or other
obligation of Seller, the existence of which constitutes or will
constitute a breach of any representation or warranty of Seller
contained in or made pursuant to Article 4.0 of this Agreement;
2.4.6 any liability or obligation arising as a result of any
violation of law or a breach of agreement by Seller, any affiliate of
Seller or any shareholder, officer, or director of Seller or any
affiliate of Seller (collectively, the "Seller Group") prior to
Closing;
2.4.7 any monetary damages (including, without limitation
direct, incidental, and consequential damages) or other liabilities,
obligations, losses or expenses (including, without limitation,
punitive, treble, and exemplary damages) for any personal injury,
product liability or tort to the extent arising as a result of the
acts or omissions of any member of the Seller Group prior to Closing;
2.4.8 any debt, liability or obligation arising from the
operations of any division or business of UNR other than the
Businesses, including without limitation debts or accounts owed by
divisions of UNR other than the Businesses for products purchased by
such other divisions from the Businesses;
2.4.9 any liability or obligation for or relating to workers
compensation or similar claims asserted by employees of Seller,
Leavitt Structural or Holco to the extent relating to any event
occurring prior to the Closing Date;
2.4.10 any liability or obligation under any Purchased
Contract or other contract or agreement assigned to Purchaser pursuant
to this Agreement to the extent relating to the business or a division
of UNR other than the Businesses;
2.4.11 any liability or obligation of UNR or UNR's
predecessors or affiliates, or the UNR Asbestos-Disease Claims Trust,
on account of claims or demands that were discharged, or with respect
to which the disposition or satisfaction thereof is expressly provided
for, pursuant to the case under Chapter 11 of the Federal Bankruptcy
Code styled UNR INDUSTRIES., INC., ET AL., Case No. 82-B-9841-9845
(the "Chapter 11 Case"), including without limitation claims and
demands that are subject to the injunction issued on or about June 1,
1989, in the Chapter 11 Case;
2.4.12 any liability of UNR for payments due employees of
the Businesses under the UNR Industries, Inc. Key Management Incentive
Variable Compensation Plan through the Closing Date (and no amounts
therefor shall be included in the Closing Statement); and
7
<PAGE>
2.4.13 any obligation or liability of Seller under or
pursuant to either of (i) the Driver Leasing Agreement dated June 5,
1995, between UNR-Leavitt Division of UNR Industries, Inc., and P.T.O.
Service, Inc. and (ii) the Settlement Agreement between the Trustees
of the Chicago Truck Drivers, Helpers and Warehouse Workers Union
(Independent) Pension Fund and UNR-Leavitt Division of UNR Industries,
Inc. executed by such parties as of June 19, 1995, and June 15, 1995,
respectively (collectively, the "PTO Agreements").
3.0 CLOSING
3.1 TIME AND PLACE OF THE CLOSING. The closing of the sale of the
Purchased Assets shall take place at Bell, Boyd & Lloyd, Three First National
Plaza, Room 3300, Chicago, Illinois at 10:00 A.M., local time, on July 1, 1996;
provided, however, that if any of the conditions to the obligations of the
parties under this Agreement has not been satisfied (or waived) by said date,
then the closing shall take place on a subsequent date, which shall be
determined by the mutual agreement of the Purchaser and the Seller (unless this
Agreement is earlier terminated pursuant to Section 11.3 hereof). Throughout
this Agreement, such event is referred to as the "Closing" and such date and
time are referred to as the "Closing Date."
3.2 PROCEDURE AT THE CLOSING. At the Closing, the parties agree to
take the following steps in the order listed below (provided, however, that upon
their completion all such steps shall be deemed to have occurred
simultaneously):
3.2.1 The Seller shall deliver to the Purchaser evidence, in
such form as in each case is reasonably satisfactory to the Purchaser,
that each of the conditions to the obligation of the Purchaser to
purchase the Shares and Purchased Assets from the Seller which is set
forth in this Agreement has been satisfied.
3.2.2 The Purchaser shall deliver to the Seller evidence, in
such form as in each case is reasonably satisfactory to the Seller,
that each of the conditions to the obligation of the Seller to sell
the Shares and Purchased Assets to the Purchaser which is set forth in
this Agreement has been satisfied.
3.2.3 Leavitt Structural shall deliver to the Purchaser duly
executed certificates in valid form evidencing the Shares owned by
Leavitt Structural, legended to refer to the fact that the Shares have
not been registered under the Securities Act of 1933 or the securities
or "blue sky" laws of any state, duly endorsed in blank or accompanied
by duly executed stock powers.
8
<PAGE>
3.2.4 The Seller shall deliver to the Purchaser such deeds,
bills of sale, endorsements, assignments and other instruments, in
such form as in each case is reasonably satisfactory to the Purchaser,
as shall be sufficient to vest in the Purchaser good and marketable
title to the Purchased Assets, free and clear of all liens, mortgages,
pledges, encumbrances, and charges of every kind (except liens
incident to the liabilities and obligations which the Purchaser has
expressly agreed in Section 2.3 hereof to assume and are not released
pursuant to Section 3.2.6 below, liens for taxes not yet due and
payable and liens or encumbrances as are not substantial in character,
amount or extent and do not materially detract from the value, or
interfere with the present use of, any of the Purchased Assets or
otherwise impair the operations of the Businesses in any material
respect).
3.2.4.A Seller shall deliver to Purchaser (i) a duly
executed estoppel certificate from the Industrial Development
Authority of Madison County, Mississippi ("Landlord"), in form and
substance reasonably acceptable to Purchaser with respect to the Lease
Agreement dated August 29, 1985, between Landlord and "UNR-Leavitt,
Division of UNR Industries, Inc.," and the Lease Agreement dated
October 14, 1988, between Landlord and "UNR-Leavitt, Division of UNR
Industries, Inc.," in each case concerning certain real property
located in Madison County, Mississippi (collectively, the "Madison
County Leases"), and (ii) a consent to assignment duly executed by
Landlord, in form and substance reasonably acceptable to Purchaser,
consenting to the assignment of each of the Madison County Leases to
Purchaser (the "Madison County Lease Consents").
3.2.4.B The Seller and the Purchaser shall duly execute and
deliver to each other a copy of the (a) Non-Competition Agreement in
the form attached hereto as Exhibit C and (b) a copy of the Supply
Agreement in the form attached hereto as Exhibit D.
3.2.4.C Leavitt Structural will deliver to Purchaser an
executed amendment to its Certificate of Incorporation that, upon
filing, will have the effect of changing Leavitt Structural's name to
a name that is not similar to Leavitt Structural's current name.
3.2.5 The Purchaser shall pay to the Seller the Cash
Consideration by delivering to the Seller by wire transfer the sum of
$95,000,000 minus any amount paid pursuant to Section 3.2.6.
3.2.6 The Purchaser shall, on behalf and for the account of
the Seller, pay to the payee of each loan or debt instrument listed on
Schedule 4.10 or otherwise reflected in the March 1996 Statement
included in Schedule 4.6 hereto as "Long-Term Liabilities" and
"Current Portion of Long-Term Liabilities" (but excluding capital
leases in each case) (the "Outstanding Debt"), by such means as is in
each case satisfactory to such holder, an amount sufficient to fully
pay and discharge
9
<PAGE>
such item of the total principal amount outstanding under such item of
Outstanding Debt together with accrued interest thereon through the Closing
Date and all prepayment penalties arising as a result of the payment of
such Outstanding Debt on the Closing Date (the "Discharge Obligations"),
and the Seller shall obtain and deliver copies to the Purchaser of (i) such
receipts or other appropriate evidence of payment of such Discharge
Obligations and (ii) such releases of liens and encumbrances releasing all
liens and encumbrances affecting the Purchased Assets to the extent such
liens and encumbrances were granted to secure payment of such items of
Outstanding Debt paid and discharged pursuant to this Section 3.2.6
(including without limitation those liens and encumbrances listed on
Schedule 4.10 hereto), in each case as the Purchaser shall reasonably
request.
3.2.7 The Purchaser shall deliver to the Seller instruments,
in such form as in each case is satisfactory to the Seller, as shall
be sufficient to effect the assumption by Purchaser of the Assumed
Liabilities.
3.2.7.A All intercompany receivables and payables between or
among Holco and any affiliate of Holco shall be cancelled with no
further liability of any party with respect thereto.
3.2.8 The Purchaser and the Seller shall execute and deliver
a cross receipt acknowledging receipt from the other, respectively, of
the Shares and Purchased Assets and the Purchase Price.
3.3 EFFECTIVE TIME. The transfer of the Purchased Assets shall be
deemed to occur at 12:01 A.M. Chicago, Illinois time on the Closing Date (the
"Effective Time"). All of the transactions described in this Article 3.0 shall
be deemed to occur simultaneously, and none shall be deemed completed until all
are completed.
3.4 ADJUSTMENT OF PURCHASE PRICE.
3.4.1 PREPARATION OF CLOSING STATEMENT. Purchaser shall
prepare and deliver to UNR, as promptly as reasonably practicable but
in any event within 90 days after the Closing Date (i) a balance sheet
prepared as of the Effective Time (the "Closing Statement") reflecting
the current assets and liabilities, property, plant, equipment and
fixed and other assets, other liabilities and owner's equity for the
Businesses as determined on a basis consistent with the March 1996
Statement included in Schedule 4.6 hereto and (ii) Purchaser's
calculation of the total assets of the Businesses less the liabilities
and capital leases of the Businesses being assumed by Purchaser, as
reflected in the Closing Statement (the "Closing Net Assets"). See
Schedule 3.4 hereto for an example of the calculation of "Net Assets"
as of March 31, 1996, as reflected in Section 3.4.4 hereto.
10
<PAGE>
Notwithstanding the foregoing, in preparing the Closing
Statement (1) the current assets shall not include any cash, cash
equivalents or other Excluded Assets, (2) a physical inventory of the
Businesses shall be taken as of the Effective Time (which Purchaser
shall afford the Seller the opportunity to observe) and shall be
accounted for on the lower of cost or market method with cost, for
such purposes, determined on a first-in first-out basis, (3) no
Excluded Liability or other liabilities for which Seller is retaining
responsibility after the Closing shall be included in the amounts
reflected on the Closing Statement, (4) no prepaid item shall be
included in the amounts shown for current assets unless such item will
be usable in the Businesses after the Closing, (5) the Closing
Statement shall include accruals for (a) liabilities for Unfunded
Pension Plan Obligations as of the Closing Date determined as provided
in Section 2.3.8(ii), (b) accrued vacation for Continued Employees,
(c) sales and product rebates and discounts earned or granted but not
paid as of the Closing Date, (d) doubtful accounts receivable and
unearned sales claims taken by customers of the Businesses (to the
extent included as an asset in the Closing Statement), determined in a
manner consistent with historical practices of the Businesses, (e)
returned shipments in transit as of the Closing Date, and (f) Other
Unpaid Benefit Obligations as of the Closing Date, and (6) the Closing
Statement shall not include (a) any accruals for Discharge Obligations
or (b) any intercompany accounts payable or receivable among Seller or
any affiliate of Seller.
3.4.2 UNR REVIEW OF CLOSING STATEMENT. If UNR disagrees
with the calculation of the Closing Net Assets as reflected on the
Closing Statement, UNR may, within 30 days after delivery of the
Closing Statement, deliver a notice to Purchaser (a "Disagreement
Notice"), setting forth its calculation of the Closing Net Assets and
specifying, in reasonable detail, those items or amounts as to which
UNR disagrees, the reasons for such disagreement, and UNR's
calculation of each disputed item in sufficient detail to permit
Purchaser to verify same. UNR shall be deemed to have agreed with all
items and amounts contained in the Closing Statement other than those
specified in such Disagreement Notice. If UNR agrees with Purchaser's
calculation of the Closing Net Assets as reflected in the Closing
Statement, or if UNR fails to deliver to Purchaser a Disagreement
Notice within such 30 day period, the Closing Statement and
Purchaser's calculation of Closing Net Assets will be deemed final.
3.4.3 DISPUTE RESOLUTION. If a Disagreement Notice is
delivered pursuant to Section 3.4.2 hereof, the parties hereto shall,
during the 20 days following such delivery, use good faith efforts to
reach agreement on the disputed items or amounts in order to determine
the final Closing Net Assets. If UNR and Purchaser are unable to reach
such agreement during such 20 day period, they thereafter shall cause
the Chicago, Illinois, office of Price Waterhouse (or, if Price
Waterhouse fails to serve, some other independent accountants of
nationally recognized standing reasonably satisfactory to UNR and
Purchaser and who shall not have any material relationship with UNR or
Purchaser) (the "Independent Accountants")
11
<PAGE>
promptly to review this Agreement and the disputed items and amounts for
the purpose of calculating the definitive amount of the Closing Net Assets.
In making such calculation, the Independent Accountants shall consider only
those items or amounts in the Closing Statement as to which UNR has
disagreed and, in their sole discretion, will determine (i) the nature and
extent of the participation by Purchaser, UNR, and their agents in
connection with the resolution of any disagreement submitted to the
Independent Accountants, (ii) the nature and extent of information that
Purchaser and UNR may submit to the Independent Accountants for
consideration in connection with such resolution, and (iii) the personnel
of the Independent Accountants who will review such information and resolve
such disagreement. The Independent Accountants who make the final
determination hereunder shall deliver to UNR and Purchaser, as promptly as
practicable, a written report setting forth their determination of the
disputed items and amounts. Such report shall be final, conclusive and
binding upon the parties hereto. For purposes of Section 3.4.4 hereof, the
"Closing Statement" shall mean the Closing Statement prepared by Purchaser,
as modified or changed by any agreement of the parties hereto and by any
determinations of any firms of independent accountants made as provided in
this Section 3.4.3. The costs and expenses of the Independent Accountants
shall be borne equally by UNR and Purchaser.
3.4.4 ADJUSTMENT PAYMENTS. Within five business days after
the earlier to occur of (i) the parties' agreement with respect to the
Closing Net Assets or (ii) the delivery of the report of the
Independent Accountants as provided in Section 3.4.3 hereof, Purchaser
shall pay to UNR or UNR shall pay to Purchaser, as applicable, the
following amounts in cash (including interest thereon computed in the
manner set forth below):
(1) If the amount of the Closing Net Assets
exceeds $62,779,434, Purchaser shall pay to
UNR an amount equal to such excess;
(2) If the amount of the Closing Net Assets
is equal to $62,779,434, no payments shall be
required by Purchaser or UNR; or
(3) If the amount of the Closing Net Assets
is less than $62,779,434, UNR shall pay to
Purchaser an amount equal to such deficiency.
In the event that any payment is required to be made under this
Section 3.4.4, the amount of the payment shall include interest
computed at the Prime Rate (as hereinafter defined) as in effect on
the first day of each month, from the Closing Date to the date the
payment is made. The "Prime Rate" shall mean the predominant of the
base rates as announced from time to time by money center banks for
loans in New York, New York. Any payment made under this Section
12
<PAGE>
3.4.4 shall be deemed an adjustment in the Purchase Price and shall be
consistently treated by the parties hereto for federal income tax purposes.
Any payment required to be made pursuant to this Section 3.4.4 will be made
by wire transfer of immediately available funds into such accounts as the
party entitled to receive such payment specifies in writing to the party
required to make such payment.
3.4.5 ACCESS TO RECORDS. From the Closing Date until the
final determination of the adjustment payment, each party and its
independent accountants and other representatives will have such
access to the books, records and files of the Businesses as may
reasonably be required to prepare, audit, review and otherwise verify
the accuracy of the Closing Statement and its preparation in
accordance with this Section 3.4.
3.5 ACCOUNTS RECEIVABLE ADJUSTMENT.
3.5.1 PREPARATION OF RECEIVABLE STATEMENT. Purchaser shall
prepare and deliver to Seller within 195 days after the Closing Date a
statement (the "Receivable Statement") setting forth (i) the name of
the obligor and the amount of each Actual Uncollected Receivable (as
hereinafter defined) and (ii) the aggregate amount of all of the
Actual Uncollected Receivables. For purposes of this Agreement,
"Actual Uncollected Receivable" shall mean each account receivable and
sales claim that was included in the Closing Statement to the extent
that such receivable or claim was not collected by Purchaser on or
before 180 days after the Closing Date. In determining whether a
particular customer has paid a receivable included in the Closing
Statement, all post-Closing Date payments from customers who are not
"C.O.D. Customers" (as hereinafter defined) shall be applied to
receivables from such customer included in the Closing Statement
(regardless of any instructions to the contrary by the customer) until
the receivables for such customer included in the Closing Statement
have been paid in full, and all post-Closing Date C.O.D. payments from
C.O.D. Customers shall be applied to post-Closing Date receivables and
any excess amounts shall be applied as instructed by the customer. For
purposes of this Section 3.5, (i) "C.O.D. Customers" shall mean (a)
the customers of the Businesses listed on Schedule 3.5 attached
hereto, (b) any additional customers that the Businesses ship to on a
"C.O.D. Basis" (as hereinafter defined) on or before the Closing Date,
and (c) any additional customers added to such schedule at and as of
the Closing Date that are reasonably acceptable to Purchaser and
Seller and (ii) "C.O.D. Basis" shall mean any method pursuant to which
a customer of the Businesses delivers to the Businesses cash or other
assets at or prior to the time of delivery of finished goods
manufactured by the Businesses as full payment or partial payment of
50% or more of the Purchase Price of such goods.
3.5.2 UNR REVIEW OF RECEIVABLE STATEMENT AND DISPUTE
RESOLUTION. If UNR disagrees with the amount of the Actual
Uncollected Receivables as reflected on the Receivable Statement, UNR
may, within 10 days after delivery of the Receivable Statement,
deliver a notice to Purchaser (a "Receivable
13
<PAGE>
Disagreement Notice"), setting forth UNR's calculation of the Uncollected
Receivables and specifying, in reasonable detail, those items or amounts as
to which UNR disagrees and the reasons for such disagreement. UNR shall be
deemed to have agreed with all items and amounts contained in the
Receivable Statement other than those specified in such Receivable
Disagreement Notice. If a Receivable Disagreement Notice is delivered
pursuant to this Section 3.5.2, UNR and Purchaser shall resolve the dispute
by following the procedures for resolution of disputes concerning the
Closing Assets set forth in Section 3.4 hereof. For purposes of Section
3.5.3 hereof, the "Receivable Statement" shall mean the Receivable
Statement prepared by Purchaser, as modified or changed by any agreement of
the parties hereto and by any determinations of any firms of independent
accountants made as provided in this Section 3.5.2.
3.5.3 RECEIVABLE ADJUSTMENT PAYMENTS. Based upon the
Receivable Statement, within five business days after the final
determination of the amount of the Actual Uncollected Receivables,
Purchaser shall pay to UNR or UNR shall pay to Purchaser, as
applicable, the following amounts in cash (including interest thereon
computed in the manner set forth below):
(1) If the aggregate amount of the Actual
Uncollected Receivables exceeds the amount of
the allowance for doubtful accounts included
in the Closing Statement (the "Receivable
Allowance"), UNR shall pay Purchaser an amount
equal to such excess;
(2) If the aggregate amount of the Actual
Uncollected Receivables is equal to the amount
of the Receivable Allowance, no payment shall
be made by either UNR or Purchaser under this
Section 3.5.3; or
(3) If the aggregate amount of the Actual
Uncollected Receivables is less than the
Receivable Allowance, Purchaser shall pay to
UNR an amount equal to such deficiency.
In the event that any payment is required to be made under this
Section 3.5.3, the amount of the payment shall include interest
computed at a rate of 12% per annum, from the 31st day after Closing
Date to the date the payment is made. Any
14
<PAGE>
payment made under this Section 3.5.3 shall be deemed an adjustment in the
Purchase Price and shall be consistently treated by the parties hereto for
federal income tax purposes.
3.5.4 ASSIGNMENT OF COLLECTION RIGHTS. Promptly after the
determination of the Actual Uncollected Receivables and the receipt by
Purchaser of all payments from UNR required by Section 3.5.3 above,
Purchaser will assign to UNR all of Purchaser's rights to the Actual
Uncollected Receivables. Purchaser shall use all reasonable efforts (as
defined in Section 11.13) to make its employees available to UNR, upon
UNR's request, to assist UNR in the collection of the Actual Uncollected
Receivables; provided, that (i) Purchaser and its employees shall have no
obligation to assist UNR if such assistance would interfere with the
business or operation of the Businesses by Purchaser or otherwise impose
any unreasonable hardship on Purchaser or its employees and (ii) UNR shall
reimburse Purchaser and its employees for any out-of-pocket expenses
incurred by Purchaser or its employees.
3.5.5 ACCESS TO RECORDS. From the Closing Date until the final
determination of the adjustment payment, each party and its independent
accountants and other representatives will have such access to the books,
records and files of the Businesses as may reasonably be required to audit,
review and otherwise satisfy themselves of the accuracy of the Receivable
Statement and its preparation in accordance with this Section 3.5.
3.6 NON-ASSIGNABLE PURCHASED CONTRACTS.
3.6.1 In the case of any Purchased Contracts which are not
assignable or transferable, either by their terms or otherwise without the
prior consent of any third party thereto (such contracts being the "Non-
Assignable Purchased Contracts"), Seller shall use commercially reasonable
efforts to obtain, or cause to be obtained, prior to the Closing Date, any
written consents or waivers necessary to the assignment of such Purchased
Contract to Purchaser as contemplated by this Agreement, and Purchaser shall
cooperate with Seller, at no additional cost to Purchaser, in such manner as may
be reasonably requested in connection therewith. In the event Seller shall be
unable to obtain any such consent or waiver to the assignment or transfer of a
Purchased Contract to Purchaser prior to the Closing (i) Seller shall continue
to use such commercially reasonable efforts after the Closing, (ii) Seller shall
provide to Purchaser, from and after the Closing, at a cost to Purchaser no
greater than the cost Purchaser would have otherwise paid under the terms of
such Non-Assignable Purchased Contract (the "Contract Costs"), benefits
substantially equivalent to each such Non-Assignable Purchased Contract, as
fully as if such consent had been obtained, to the extent Seller is reasonably
capable of providing such benefits and (iii) at Purchaser's option, Purchaser
may procure such equivalent benefits from third parties during the final 90 days
of the current term of any such Non-Assignable Purchased Contract (or at any
time within 90 days of the date on which the Non-Assignable Purchased Contract
which
15
<PAGE>
such equivalent benefits replace would have by its terms terminated or
entitled the other party thereto to terminate or renegotiate the costs of
such benefits) without any further liability to Seller; PROVIDED, HOWEVER,
that (A) Purchaser shall provide Seller prior written notice of procuring
any such equivalent benefits 30 days (or, if 30 days' notice is not
practicable, such notice, if any, which is practicable) prior to obtaining
such equivalent benefits pursuant to clause (iii) above, and (B) in the
event Purchaser procures equivalent benefits pursuant to clause (iii),
Seller shall be relieved of its obligations under this Section 3.6.1 with
respect to the Non-Assignable Purchased Contracts with respect to which
such equivalent benefits have been so procured by Purchaser and may take
any and all action available to Seller to terminate its obligations under
such Non-Assignable Purchased Contracts.
3.6.2 Purchaser agrees to pay, or reimburse Seller for, 100%
of Seller's direct out-of-pocket cost, fees and expenses (excluding
attorneys' fees and fees and expenses of other professionals and
employees of Seller), actually incurred by Seller in fulfilling its
obligations to Purchaser under Section 3.6.1 (ii), PROVIDED, that the
amount of such costs, fees and expenses, shall not exceed the related
Contract Costs. Purchaser shall make such payments to Seller within 30
days after the Seller's submission of an itemized invoice therefor in
detail reasonably sufficient to Purchaser.
3.6.3 Notwithstanding the foregoing, the provisions of this
Section 3.6 shall not apply with respect to the Madison County Leases
or otherwise affect Seller's obligations under Section 3.2.4.A.
4.0 REPRESENTATIONS AND WARRANTIES OF THE SELLER
In order to induce the Purchaser to enter into this Agreement and to
consummate the transactions contemplated hereunder, UNR and Leavitt Structural,
jointly and severally, make the following representations and warranties (for
purposes of this Article 4.0, references to Purchased Assets and similar terms
shall include the assets of Holco except where the context otherwise requires):
4.1 ORGANIZATION, POWER AND AUTHORITY OF THE SELLER. Each of UNR and
Leavitt Structural is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has full
corporate power and authority (i) to own or lease the Purchased Assets being
transferred by it and to conduct its Business as now being conducted, (ii) to
enter into this Agreement and to sell, convey, transfer, assign and deliver the
Purchased Assets and the Shares being transferred by it to the Purchaser as
provided herein, and (iii) to carry out the other transactions and agreements
contemplated hereby.
4.2 ORGANIZATION, POWER, AUTHORITY AND ASSETS AND PROPERTIES OF HOLCO.
Holco is a corporation duly organized and legally existing in good standing
under the laws of its state of incorporation and has full corporate power and
authority and all licenses and permits necessary to own or lease its properties
and to carry on its business. Holco is qualified to transact business as
16
<PAGE>
foreign corporations in each jurisdiction where the failure to so qualify would
have a material adverse effect (as defined in Section 11.13).
4.3 CAPITAL STOCK OF THE COMPANIES. The authorized, issued and
outstanding capital stock of the Companies is as set forth in Schedule 4.3
hereto. All of such stock of Leavitt Structural is owned by UNR, and all of
such stock of Holco is owned by Leavitt Structural, all voting rights in the
Companies are vested exclusively in such stock, and all of such stock is validly
authorized and issued, fully paid and non-assessable. Except for this
Agreement, there are no outstanding warrants, options or rights of any kind to
acquire from UNR, Leavitt Structural or Holco any shares of capital stock or
securities of either of the Companies of any kind, and there are no voting
rights, voting trusts, proxies or other agreements or understandings affecting,
or any pre-emptive rights with respect to the issuance or sale of shares of
capital stock of, either of the Companies and neither of the Companies has any
obligation to acquire any of its issued and outstanding shares of capital stock
or any other security issued by it from any holder thereof. As of, and from and
after June 1, 1989, Leavitt Structural was and has been a direct or indirect
wholly-owned subsidiary of UNR.
4.4 SUBSIDIARIES. Except for Holco, neither of the Companies has any
subsidiary or any equity interest or the right or obligation to acquire an
equity interest in any other person or entity.
4.5 STATUS AND EFFECT OF DELIVERY OF THE SHARES. UNR is the lawful
owner of all of the capital stock of Leavitt Structural. Leavitt Structural is
the lawful owner of the Shares and has valid marketable title thereto, free and
clear of all liens, pledges, encumbrances, claims and equitable interests of
every kind, except that the Shares are pledged to secure the repayment of
indebtedness to the Bank of America Illinois under a Credit Agreement dated
April 5, 1991.
4.6 FINANCIAL SUMMARIES. Schedule 4.6 contains:
4.6.1 a statement of income and operating expenses of the
Businesses for each of the two years ended December 31, 1994 and 1995
("Statement of Operations");
4.6.2 a statement of assets and liabilities of the
Businesses as of December 31, 1994 and 1995 ("Year End Statement of
Assets and Liabilities");
4.6.3 a statement of assets and liabilities of the
Businesses as of March 31, 1996 (the "March 1996 Statement") (together
with the Year End Statement of Assets and Liabilities, the "Statement
of Assets and Liabilities").
The Statement of Operations and the Statement of Assets and Liabilities
(hereinafter sometimes referred to together as the "Financial Summaries") have
been prepared by UNR's management in accordance with UNR's accounting policies
and procedures, consistently applied, and are based on books and records of the
Seller relating to the Businesses which have been prepared on a consistent
basis, and have been derived from financial information included in the audited
consolidated financial statements of UNR, but such financial information has not
been audited by UNR's independent public accountants for the purpose of
expressing an opinion on the separate
17
<PAGE>
financial statements of the Businesses. The Statement of Assets and Liabilities
and the Statement of Operations in each case are in accordance with accounting
principles generally accepted for divisional enterprises, which principles, with
respect to the Statement of Operations, were consistently applied for the
periods to which the Statement of Operations relate, and fairly present, as of
their respective dates, the assets and liabilities and the operations,
respectively, of the Businesses.
4.7 LIABILITIES OF THE SELLER AND THE COMPANIES. The Seller and the
Companies have no liabilities or obligations, absolute, contingent or otherwise,
relating to the Businesses or the Purchased Assets except: (i) to the extent
reflected in the March 1996 Statement; (ii) to the extent specifically set forth
herein or in any of the Schedules attached hereto; and (iii) normal liabilities
incurred in the ordinary course of business since March 31, 1996, and which,
individually or in the aggregate, have not had and would not reasonably be
expected to have a material adverse effect.
4.8 TAX MATTERS.
4.8.1 Seller has timely filed all of the following tax
returns and reports (collectively the "Tax Returns") required to be
filed within three years prior to the Closing by UNR, the Companies,
and each consolidated or affiliated group of which Holco has been a
member prior to the Closing (an "Affiliated Group"); all federal
income tax returns, all state income tax returns with respect to which
Holco could be liable for the tax due, and all other returns,
including without limitation, all sales and use tax, gross receipts,
property, payroll and other tax returns with respect to which Holco
could be liable for a significant amount of the tax due. Neither UNR,
the Companies, nor any Affiliated Group was required during the three
year period prior to the Closing, nor was Holco required at any time,
to file any foreign or local income tax return. Seller has paid in
full or made adequate provision by the establishment of reserves for
all Taxes which have become due with respect to all tax returns and
reports for all periods. All Tax Returns are correct and complete in
all material respects. There are no tax liens upon any of the
Purchased Assets or assets of Holco. Seller has made all payments
when due of taxes or estimated taxes with respect to the Tax Returns
(or any return which would be a Tax Return but for the fact that it
has not been filed prior to the Closing) in amounts sufficient to
avoid the imposition of any penalty.
4.8.2 All taxes and other assessments and levies with
respect to the Purchased Assets and the operation of the Businesses
which the Seller or the Companies were required by law to withhold or
to collect have been duly withheld and collected, and have been paid
over to the proper governmental entity or are being held by the Seller
or the Companies for such payment.
4.8.3 Except for (a) the current pending audit regarding
UNR's consolidated tax returns for the years 1983 through 1993 (the
"Pending Audit"), (b) audits of sales, use and similar taxes that do
not involve the Businesses and (c) audits that either have been
concluded more than three years prior to the Closing
18
<PAGE>
and with respect to which any deficiency has been paid or which were concluded
without any change or deficiency proposed by the taxing authority, none of the
Tax Returns has been audited or is being audited by any taxing authority, and no
assessment, audit or other proceeding by any taxing authority, court, or other
governmental or regulatory authority is proposed, pending, or threatened with
respect to the Tax Returns.
4.8.4 There are no outstanding agreements, waivers, or
arrangements extending the statutory period of limitations applicable
to any claim for or the period for the collection or assessment of
Taxes for which either the Purchaser or Holco would or could be liable
or which would or could be a lien upon the Purchased Assets.
4.8.5 All positions taken on federal Tax Returns that could
reasonably be expected to give rise to a penalty for substantial
understatement pursuant to Section 6662(d) of the Internal Revenue
Code of 1986, as amended (the "Code") have been disclosed on such Tax
Returns.
4.8.6 Neither UNR nor Leavitt Structural is a foreign person
within the meaning of Section 1445(b)(2) of the Code.
4.8.7 Holco is not a partner of any partnership and no
interest in any partnership is included in the Purchased Assets.
4.8.8 Neither UNR nor any of the Companies has made any tax
elections under any section of the Code, including without limitation
under any of Sections 108, 168, 338, 441, 472, 1017, 1033, 1503, or
4977 of the Code or Treasury Regulations Section 1.1502 (or any
predecessor thereof) that affects Holco or the assets of Holco. No
consent to the application of Section 341(f)(2) of the Code (or any
predecessor thereof) has been made or filed by or with respect to
Holco. None of the Purchased Assets or assets of Holco is an asset or
property that the Purchaser or any of its affiliates is or will be
required to treat as being (i) owned by any other person pursuant to
the provisions of Section 168(f)(8) of the Internal Revenue Code of
1954 as amended, and in effect immediately before the enactment of the
Tax Reform Act of 1986, or (ii) tax-exempt use property within the
meaning of Section 168(h)(1) of the Code.
4.8.9 No closing agreement pursuant to Section 7121 of the
Code (or any predecessor provision) or any similar provision of any
state, local, or foreign law has been entered into by or with respect
to UNR or any of the Companies or any assets or properties thereof
which would be binding upon or enforceable against the Purchaser,
Holco or the Purchased Assets.
4.8.10 Neither UNR nor any of its Companies has agreed to or
is required to make any adjustment pursuant to Section 481(a) of the
Code (or any predecessor provision) by reason of any change in any
accounting method of UNR
19
<PAGE>
or the Companies, which change of accounting method would be binding upon
Holco or the Purchaser with respect to the Businesses or the Purchased
Assets. Neither UNR nor any of the Companies has any application pending
with any taxing authority requesting permission for any changes in any
accounting method of UNR or any of the Companies which would have such
effect, and the I.R.S. has not proposed any such adjustment or change in
accounting method therefor.
4.8.11 UNR has previously delivered to Purchaser copies of
the portions of the federal and state income Tax Returns for 1994 that
related to Holco and the Businesses, and copies of any non-unitary
state income Tax Returns filed by any of the Companies, and represents
that such materials are true, correct and complete. UNR shall
promptly deliver true, correct, and complete copies of the same
materials in the same format for 1995 and 1996 when they are complete
and ready for filing.
4.8.12 None of UNR or the Companies is a party to, is bound
by, or has any obligation under any tax sharing contract or similar
contract and no such contract shall be entered into or amended by UNR
or the Companies at or prior to the Closing.
4.8.13 Neither UNR nor any member of its Affiliated Group
has an "excess loss account" (as such term is described in Treasury
Regulations Section 1.1502) existing with respect to any of the
Companies, and none of the Companies has any "deferred intercompany
gain" (as such term is described in Treasury Regulations Section
1.1502) with respect to UNR or any member of its Affiliated Group.
For purposes of this Agreement, the term "Taxes" and "taxes" shall mean all
taxes, charges, fees, levies, or other similar assessments or liabilities,
including without limitation (a) income, gross receipts, ad valorem, premium,
excise, real property, personal property, sales, use, transfer, withholding,
employment, payroll, medicare, and franchise taxes imposed by the United States
of America, or by any state, local, or foreign government, or any subdivision,
agency, or other similar person of the United States or any such government; and
(b) any interest, fines, penalties, assessments, or additions to taxes resulting
from, attributable to, or incurred in connection with any Tax or any contest,
dispute, or refund thereof.
4.9 REAL ESTATE OF THE SELLER AND THE COMPANIES.
4.9.1 Schedule 4.9 sets forth descriptions of the Purchased
Real Estate and of real properties owned by Holco (together with the
Purchased Real Estate, the "Transferred Real Estate") and the nature
and amount of any mortgages, tax liens or other liens thereon.
Schedule 4.9 also identifies each parcel of the Purchased Leasehold
Premises and real properties leased by Holco (together with the
Purchased Leasehold Premises, the "Transferred Leasehold Premises")
and the date and term of each lease, the lessee and lessor, the
location, including address and a brief description thereof (including
approximate square footage and usage).
20
<PAGE>
The Transferred Real Estate and the Transferred Leasehold Premises comprise
all of the real property used in the operation of the Businesses.
4.9.2 The Seller and Holco have good and marketable title to
the Transferred Real Estate and a valid leasehold interest in the
Transferred Leasehold Premises, free and clear of all liens,
mortgages, pledges, encumbrances, charges, assessments, restrictions,
covenants and easements or title defects of any nature whatsoever,
except for liens set forth on Schedule 4.10, liens for real estate
taxes not yet due and payable, and such imperfections of title and
encumbrances, if any, as are not substantial in character, amount or
extent and do not materially detract from the value, or materially
interfere with the present use, of the Transferred Real Estate or the
Transferred Leasehold Premises or otherwise impair the operations of
the Businesses in any material respect.
4.9.3 The buildings and related improvements located on the
Transferred Real Estate and the Transferred Leasehold Premises are in
good operating condition, normal wear and tear excepted, and are
sufficient to satisfy the current levels of operations of the
Businesses.
4.9.4 None of the Seller or Holco has received any notice
of: (i) any condemnation proceeding with respect to any portion of
the Transferred Real Estate or the Transferred Leasehold Premises and
to the best knowledge of the Seller and Holco no proceeding is
contemplated by any governmental authority; or (ii) any special
assessment which may affect the Transferred Real Estate or the
Transferred Leasehold Premises and to the best knowledge of the Seller
and Holco no such special assessment is contemplated by any
governmental authority.
4.10 GOOD TITLE TO THE PURCHASED ASSETS. UNR and the Companies have
good and marketable title to all of the Purchased Assets, free and clear of all
liens, mortgages, pledges, encumbrances or charges of every kind, nature, and
description whatsoever, except those set forth in Schedule 4.10 and except for
liens, mortgages, pledges, encumbrances or charges, if any, as are not
substantial in character, amount or extent and do not materially detract from
the value, or interfere with the present use, of any of the Purchased Assets or
otherwise impair the operations of the Businesses in any material respect or
which will be released at or prior to the Closing.
4.11 LICENSES AND PERMITS. Schedule 4.11 contains a true and complete
list of all licenses and other required governmental or official approvals,
permits or authorizations, which the failure to possess would have a material
adverse effect. UNR and the Companies possess all licenses, approvals, permits
and authorizations identified on Schedule 4.11, all such licenses,
21
<PAGE>
approvals, permits and authorizations are in full force and effect, UNR and the
Companies are in compliance in all material respects with their requirements,
and no proceeding is pending or, to the knowledge of UNR and the Companies,
threatened to revoke or amend any of them.
4.12 PROPRIETARY RIGHTS.
4.12.1 The Purchased Proprietary Rights and the proprietary
rights owned by Holco (together with the Purchased Proprietary Rights,
the "Transferred Proprietary Rights") include all proprietary rights
used in the Businesses (other than trademarks, trade names, service
marks and symbols denoting or connoting UNR, including, without
limitation, UNR Industries, Inc. and UNR), the failure to possess
which could reasonably be expected to have a material adverse effect.
Schedule 1.2.8 contains a complete list of all of the Transferred
Proprietary Rights.
4.12.2 Each of UNR and the Companies is the sole owner,
legally and beneficially, and has good and marketable title to the
Transferred Proprietary Rights set forth in Schedule 1.2.8 as being
owned by it, in each case free and clear of any and all liens,
pledges, obligations, charges, mortgages, agreements, claims,
liabilities, licenses, restrictions and encumbrances of any kind or
nature whatsoever, except such imperfections or encumbrances, if any,
as are not substantial in character, amount or extent and do not
materially detract from the value, or interfere with the present use,
of the Transferred Proprietary Rights. Except as set forth on
Schedule 1.2.8, to the best knowledge of UNR and the Companies, no
third party claims any rights in or to the Transferred Proprietary
Rights and the Transferred Proprietary Rights do not infringe on or
otherwise violate any rights of any third party and no third party has
asserted any claim of any such infringement or violation.
4.12.3 Upon the sale, assignment, transfer and conveyance by
Seller of the Purchased Proprietary Rights to Purchaser hereunder,
Purchaser will have good and marketable title to all of such Purchased
Proprietary Rights, free and clear of all liens, pledges, obligations,
charges, mortgages, agreements, claims, liabilities, licenses,
restrictions and encumbrances of any kind or nature whatsoever, except
such imperfections or encumbrances, if any, as are not substantial in
character, amount or extent and do not materially detract from the
value, or interfere with the present use of the Purchased Proprietary
Rights.
4.13 ADEQUACY OF THE PURCHASED ASSETS. The Purchased Assets
constitute, in the aggregate, all of the property necessary for the conduct of
the Businesses as presently conducted.
4.14 INSURANCE. The Purchased Assets and third-party claims are
insured or insured against to the extent and in the manner that is customary for
companies engaged in a business similar to each of the Businesses except to the
extent that such Purchased Assets or claims are self-insured. UNR and the
Companies will maintain such coverage in force up to the Closing
22
<PAGE>
Date. The interest of UNR or the Companies in such insurance policies will not
be transferred hereunder and Purchaser shall not be subrogated to the rights of
UNR or the Companies thereunder.
4.15 LITIGATION. Except as set forth in Schedule 4.15, there are no
actions, suits, claims, governmental investigations or arbitration proceedings
pending or, to the knowledge of UNR and the Companies, threatened against or
affecting any of the Purchased Assets, the Businesses, Leavitt Structural or
Holco. There are no writs, judgments, decrees, injunctions or similar orders of
any person, entity or governmental agency or authority outstanding against
Seller or Holco affecting the Purchased Assets or the Businesses or which may
reasonably be expected to have a material adverse effect, and Holco is not
subject to or otherwise bound by any outstanding writ, judgment, decree,
injunction or similar order of any person, entity or governmental agency or
authority.
4.16 NO MATERIAL ADVERSE CHANGE. Since December 31, 1995, except as
disclosed in the Schedules hereto, there has not been (i) any change in the
business, properties or financial condition of the Businesses other than changes
occurring in the ordinary course of business which in the aggregate have not had
and could not reasonably be expected to have a material adverse effect, or (ii)
to the best knowledge of UNR and the Companies, any threatened or prospective
event or condition which could reasonably be expected to have a material adverse
effect.
4.17 ABSENCE OF CERTAIN ACTS OR EVENTS. Since December 31, 1995, UNR
and the Companies have not: (i) committed to or paid any bonus or increased the
rate of compensation or profit sharing of any of the employees of any of the
Businesses, except in the ordinary course and consistent with past practice;
(ii) sold or transferred any of the assets of any of the Businesses other than
in the ordinary course of business; (iii) made or obligated themselves to make
capital expenditures with respect to the Businesses aggregating more than
$500,000 except as disclosed in part III of Schedule 1.2.6; (iv) incurred any
material obligations or liabilities (including any indebtedness) or entered into
any material transaction with respect to the business and operations of the
Businesses, except for this Agreement and the transactions contemplated hereby;
(v) suffered any theft, damage, destruction or casualty loss with respect to the
Businesses in excess of $500,000 or that otherwise could reasonably be expected
to have a material adverse effect; (vi) experienced any material change in
production schedules, acceleration of sales, or reduction of aggregate
administrative, marketing, advertising and promotional expenses of the
Businesses other than in the ordinary course of business; or (vii) experienced
any change in the relations of the Businesses with their employees, agents,
customers or material suppliers, or any loss of business or increase of the cost
of raw materials or packaging, which in any case could reasonably be expected to
have a material adverse effect.
4.18 COMPLIANCE WITH LAWS.
4.18.1 UNR and the Companies are, and, prior to the date
hereof have been (except to the extent cured with no further liability
or reasonable expectation of a material adverse effect), in compliance
with all laws, regulations, judgments, decrees and similar orders
applicable to the operations of the Businesses and the Purchased
Assets, the noncompliance with which would be substantial in character
23
<PAGE>
or extent or which could reasonably be expected to interfere with the use,
or impair the operations, of the Businesses in any material respect or
result in the imposition of any material penalty or otherwise result in a
material adverse effect. None of UNR or the Companies has received
notification of any asserted past or present failure to comply with any
such laws, regulations, judgments, decrees or similar orders and, to the
best knowledge of UNR and the Companies, no proceeding with respect to any
such violation is pending or contemplated.
4.18.2 None of UNR or the Companies, nor, to their best
knowledge, any employee of any of the Businesses, has made any payment
of funds in connection with the Businesses prohibited by law, and no
funds have been set aside to be used in connection with any of the
Businesses for any payment prohibited by law.
4.18.3 To Seller's knowledge, there are no criminal felony
indictments or other criminal felony proceedings pending or threatened
against any present officers, employees or agents of Seller or Holco
with respect to actions taken in such capacity.
4.18.4 Neither Seller nor Holco is subject to any pending
investigation by any governmental agency or authority, including the
United States Federal Trade Commission or Department of Justice, or
any order of or consent decrees issued by or entered into with any
such governmental agency or authority, and has not received any
notification and is not otherwise aware of any threatened or pending
investigation by any governmental agency or authority relating to
Holco or the Businesses.
4.19 ENVIRONMENTAL MATTERS.
4.19.1 Except as disclosed on Schedule 4.19 hereto: (i) to
the knowledge of the Seller and the Companies, (A) the business and
operations of the Businesses do not violate and have not (except to
the extent cured with no further liability or reasonable expectation
of a material adverse effect) violated any applicable Environmental
Law in effect as of the date hereof; (B) each Business is in
possession of all Environmental Permits required under any applicable
Environmental Law for the conduct or operation of its business (or any
part thereof), and each Business is in all material respects in
compliance with all of the requirements and limitations included in
such Environmental Permits; (C) none of the Businesses stores or uses
any pollutants, contaminants or hazardous or toxic wastes, substances
or materials; (ii) none of the Businesses has received any notice from
any governmental authority or any private person or entity that its
business or operations are in violation of any Environmental Law or
any Environmental Permit or that it is responsible (or potentially
responsible) for the cleanup of any pollutants, contaminants, or
hazardous or toxic wastes, substances or materials; (iii) none of the
Businesses is the subject of any federal, state, local or private
litigation or proceedings involving a demand for damages or other
potential liability with respect to violations of Environmental Laws;
and (iv) none of the
24
<PAGE>
Businesses has buried, dumped, disposed of, or spilled or released material
quantities of any pollutants, contaminants or hazardous wastes, substances
or materials.
4.19.2 For purposes of this Agreement: (i) "Environmental
Law" means any law, statute, regulation or order, consent decree or
settlement agreement which relates to or otherwise imposes liability
or standards of conduct concerning discharges, emissions, releases or
threatened releases of noises, odors or any pollutants, contaminants
or hazardous or toxic waste, substances or materials, whether or not
as matter or energy, into ambient air, water, or land, or otherwise
relating to the manufacture, processing, generation, distribution,
use, treatment, storage, disposal, clean-up, transport or handling of
pollutants, contaminants, or hazardous waste, substances or materials,
including (but not limited to) the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 ("CERCLA"), the
Superfund Amendments and Reauthorization Act of 1986, as amended, the
Resource Conservation and Recovery Act of 1976, as amended, the
Federal Water Pollution Control Act Amendments of 1972, the Toxic
Substances Control Act, the Clean Water Act of 1977, as amended, any
so-called "Super Lien" law, and any other similar federal, state or
local statutes; (ii) "Environmental Permit" means any permit, license,
approval, consent or other authorization required by or pursuant to
any applicable Environmental Law; (iii) "Contaminant" means any
hazardous substance or any pollutant or contaminant, in each case
defined as such under CERCLA, or any petroleum or petroleum-derived
substance or waste; (iv) "Release" means release, spill, emission,
leaking, pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration into the indoor or outdoor environment or into
or out of the Purchased Real Estate and Purchased Leasehold Premises,
whether or not intentional, including the movement of Contaminants
through or in the air, soil, surface water, groundwater or Property;
and (v) "Remedial Action" means actions required to (A) clean up,
remove, treat or in any other way address Contaminants in the indoor
or outdoor environment; (B) prevent the Release or threat of Release
or minimize the further Release of Contaminants; or (C) perform
Pre-remedial studies and investigations and post-remedial monitoring care.
4.20 EMPLOYEE MATTERS; LABOR RELATIONS.
4.20.1 Except as set forth on Schedule 4.20, none of the
employees of any of the Businesses is covered by employment contracts
except customary written and non-written understandings concerning
employment, terminable at will without cost or other liability, nor
are any of the employees of any of the Businesses members of any union
or covered by union contracts, nor is any of the Seller or the
Companies aware of any plan or solicitation of employees of any of the
Businesses to form or join a union in the past 24 months. Except as
set forth on Schedule 4.20, none of the Seller or the Companies is a
party to or bound by any employment agreement (oral or written) or any
collective bargaining or other labor agreement with respect to any of
the Businesses that could in any way affect
25
<PAGE>
Purchaser, the Purchased Assets or any employees of such Business which
Purchaser may hire after the Closing. Except as provided with respect to
vacation pay in the collective bargaining or other labor agreements set
forth on Schedule 4.20 or pursuant to the Change of Control Agreements
referred to in Part I of Schedule 4.20 and as provided in the Severance Pay
Policy contained in the Standard Procedure Manual of the Businesses, none
of the employees of any of the Businesses is entitled to receive any
severance benefits from UNR or the Companies upon termination of employment
with UNR or either of the Companies.
4.20.2 With respect to the employees of the Businesses,
Seller and the Companies are in compliance in all material respects
with the Immigration Reform and Control Act of 1986, as amended, and
Seller and the Companies have complied in all material respects with
all applicable federal, state and local laws relating to the
employment of labor, including without limitation, the provisions
thereof relating to wages, non-discriminatory hiring, promotional and
employment practices and procedures, collective bargaining and payment
of Social Security, unemployment compensation, worker's compensation
and similar taxes, and Seller and the Companies are not presently
liable to any person or governmental agency for any arrears of wages
or subject to any liabilities or penalties for failure to comply with
any of the foregoing laws. With respect to the employees of the
Businesses and except as may be set forth on Schedule 4.20 or Schedule
4.15, there are no outstanding charges or claims of a material nature
against any of the Seller or the Companies or any of their respective
officers, directors, agents or employees involving any alleged or
actual violation of such employer or any such person of any provision
of the National Labor Relations Act, the Age Discrimination in
Employment Act, the Equal Employment Opportunity Act of 1964, or any
other federal, state or municipal law concerning equal employment
opportunities, equal pay legislation or wage and hour obligations
contained in the Fair Labor Standards Act; nor, to the knowledge of
such employer, has there been any threat of any such claim or charge.
4.20.3 Except as set forth on Schedule 4.15, no employee of
the Businesses has threatened or asserted any claim, or otherwise is
subject to any pending claim, against UNR or either of the Companies
regarding working conditions, labor relations, discrimination or other
employment or labor related matters.
4.21 EMPLOYEE BENEFITS. Schedule 4.21 contains a list of all
significant employee benefit plans and policies applicable to employees of the
Businesses. The term "employee benefit plans," as used herein, includes all
written or oral plans, contracts or other arrangements of benefit or advantage
to any employee or any class of employees among employees of the Businesses
including, without limitation, stock option, bonus, management incentive, profit
sharing, pension plan, deferred compensation, retirement, medical, disability,
life and other insurance, severance and termination and income protection
arrangements. Summaries of such plans and policies have been provided to
Purchaser and copies of all such written plans and descriptions of non-written
26
<PAGE>
policies will be provided upon Purchaser's request. Except as set forth on
Schedule 4.21 or as contemplated by Section 4.20, all obligations of each of UNR
and the Companies, or their affiliates, whether arising by operation of law, by
contract or by past custom, for payments by such employer, with respect to
unemployment compensation benefits, pension and retirement benefits, social
security benefits, or other benefits for the employees of the Businesses,
whether under such employer's benefit plans or otherwise with respect to such
plans, including, without limitation, those set forth on Schedule 4.21, in
respect of periods prior to the Closing Date, have been paid or shall be paid
when due by such employer or, if assumed by Purchaser, properly accrued and
reflected in the March 1996 Statement. Each of the "employee benefit plans"
listed on Schedule 4.21 is in compliance in all material respects with all
aspects of ERISA (as defined below), the Code, and all other applicable laws,
and any regulations or rulings under such laws. The transactions contemplated
by this Agreement will not result in the imposition of any liability or
obligation on Purchaser as a successor to UNR or the Companies or otherwise with
respect to such plans (except to the extent assumed by Purchaser), and UNR shall
promptly pay or discharge any such liability or obligation and defend and hold
Purchaser harmless from any liability, obligation or loss resulting therefrom.
No liability on the part of UNR or the Companies to the Pension Benefit Guaranty
Corporation, other than applicable insurance premiums, has been or could
reasonably be expected to be incurred with respect to any such plan at or prior
to the Closing. Except for asset transfers which have been reported or with
respect to which the reporting requirements have been waived, there has been no
reportable event (as described in Section 4043(b) of the Employee Retirement
Income Security Act of 1974, as amended, and the regulations thereunder
("ERISA")) with respect to any such plan, nor has any notice as to liability
under Subtitle D of Title IV of ERISA been received, and there are no
circumstances that might result in the imposition of a lien on any of the
Purchased Assets pursuant to ERISA, the Code or any other applicable law or
regulation. A principal purpose of the transactions described or contemplated
in this Agreement is not to evade or avoid liability under ERISA.
4.22 PRODUCT RECALLS. There has not been any product recall, or
post-sale warning or similar action (collectively, "recalls") conducted with
respect to any product manufactured, shipped, delivered or sold by any of the
Businesses, or, to the knowledge of UNR and the Companies, any investigation
or consideration of, or decision made by, any of the Businesses concerning
whether or not to undertake any recalls.
4.23 ABSENCE OF DEFAULTS.
4.23.1 Schedule 1.2.6 and Part II of Schedule 4.9 attached
hereto contain a true and complete list of the following:
(i) all leases pursuant to which UNR or the Companies lease
any real property for use in the Businesses;
(ii) all leases pursuant to which UNR or the Companies lease
any personal property for use in the Businesses that provide,
individually, rental payments in excess of $10,000 per year or in
excess of $20,000 during their duration;
27
<PAGE>
(iii) all contracts, agreements or other instruments of UNR
or the Companies relating to the Businesses that by their terms can
reasonably be expected to require the future payment by or to UNR or
either of the Companies of $10,000 or more;
(iv) all sales agency or distributor agreements relating to
the Businesses.
(v) all contracts, agreements or other instruments related to
the Businesses which were not entered into in the ordinary course of
business of the Businesses or that by their terms reasonably can be
expected to require the future payment by or to UNR or either of the
Companies of $10,000 or more; and
(vi) all other contracts, agreements or other instruments to
which UNR or either of the Companies is a party and which are material
to the operations of the Businesses.
4.23.2 Schedule 4.10 attached hereto contains a true and
complete list of the following:
(i) all mortgages, indentures, notes, loan agreements,
security agreements, pledge agreements, lien retention agreements,
consignment agreements, processing agreements for third parties,
installment obligations or other instruments for or relating to any
borrowings or otherwise relating to the Businesses or the Purchased
Assets; and
(ii) all guarantees of Holco relating to any third party
debt.
4.23.3 UNR and the Companies are not in material default
under any contract, order, lease, commitment or agreement referred to
in Schedules 1.2.6 or 4.9 hereto ("Material Agreements") and no
condition exists which, with the giving of notice or passage of time
or both, would constitute a material default thereunder or constitute
an event creating rights of acceleration, termination or cancellation
thereof, and no person has asserted in writing that UNR or either of
the Companies is in default under, or in breach of (with or without
the giving of notice or the passage of time), any material term or
provision of any of the Material Agreements. To the best of Seller's
and the Companies' knowledge, there are no existing material defaults
by any third party under any contract, order, lease, commitment or
agreement referred to in Schedule 1.2.6 hereto and no condition exists
which, with the giving of notice or passage of time or both, would
constitute a material default thereunder or constitute an event
creating rights of acceleration, termination or cancellation thereof,
and each such Material Agreement is in full force and effect and
enforceable in accordance with its terms (except as enforceability may
be limited by laws affecting creditors' rights or principles
restricting equitable relief). Neither UNR nor any Company has waived
any rights under any Material Agreement, which waiver reasonably could
be expected to have a material adverse effect.
28
<PAGE>
4.24 DUE AUTHORIZATION; BINDING OBLIGATION. The execution, delivery
and performance of this Agreement and each of the other agreements contemplated
hereby and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action of Seller. This Agreement has
been duly executed and delivered by Seller and is a valid and binding obligation
of Seller, enforceable in accordance with its terms. Neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will: (i) conflict with or violate any provision of Seller's certificate
of incorporation or bylaws, or of any law, ordinance or regulation or any decree
or order of any court or administrative or, to the best of such Seller's
knowledge, other governmental body which is either applicable to, binding upon
or enforceable against the Seller or requires any filing or authorization under
any applicable law, ordinance or regulation other than as may be required under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the rules and
regulations thereunder (the "HSR Act"); (ii) result in any breach of or default
under any mortgage, contract, agreement, indenture, will, trust or other
instrument which is either binding upon or enforceable against UNR or the
Companies or the Purchased Assets (except that security interests in certain of
the Purchased Receivables may not have been released by the date of execution
hereof, but will be so released at or prior to Closing); (iii) require UNR or
either Company to obtain any consent, approval, or action of, or make any filing
with or the giving notice to, any person or entity except under the HSR Act as
contemplated by Section 3.2.4.A hereto or those which the failure to obtain,
make or give, individually or in the aggregate, would not reasonably be expected
to have a material adverse effect; or (iv) result in the creation or imposition
of any lien or encumbrance upon any of the Purchased Assets, other than liens
and encumbrances created by Purchaser.
4.24.A INTERCOMPANY TRANSACTIONS. Except for purchases by divisions of
UNR other than the Businesses of finished products manufactured by the
Businesses, there are no contracts or arrangements for purchase, sale or lease
of goods, equipment or services, or any tax sharing or similar agreements,
between Leavitt Structural, Holco or the Businesses, on the one hand, and Seller
or any affiliate of Seller other than Leavitt Structural or Holco, on the other
hand.
4.24.B INVENTORIES. The inventories included in the March 1996 Statement
consist (and those to be reflected in the Closing Statement will consist) only
of items of quality and quantity commercially useable and saleable in the
ordinary course of the Businesses, except for any items of obsolete material or
material below standard quality or commercial specifications, all of which have
been (and for purposes of the Closing Statement will be) written down to the
lower of cost
29
<PAGE>
or realizable market value, or for which adequate reserves have been (and for
purposes of the Closing Statement will be) provided. The quantities of all
inventories are reasonable, and as of the Closing Date will be reasonable, in
the circumstances of the Businesses business cycle.
4.24.C BUSINESS RELATIONS. The Businesses are not required to provide any
bonding or other financial security arrangements in any material amount in
connection with any transactions with any of their customers or suppliers. To
Seller's knowledge, no customer of the Businesses intends to cease doing
business with (or substantially reduce its business with) the Businesses, which
cessation (or reduction) would have a material adverse effect. Since March 31,
1996, the Businesses have not experienced any difficulties in obtaining any raw
materials necessary to the operations of the Businesses that had, or reasonably
may be expected to have, a material adverse effect and, to Seller's knowledge,
no such shortage of raw materials that would have such a material adverse effect
is threatened.
4.24.D PRODUCT WARRANTIES. Neither UNR nor either Company has made any
express warranty as to the condition, value, design, operation, compliance with
applicable law, merchantability or fitness for use of any of the products sold
by the Businesses, except as such warranties as may be contained in customer
purchase orders or shipping tags with respect to the specifications pursuant to
which such products were manufactured or the tensile strength of such products.
4.24.E LOCATION OF INVENTORY AND ASSETS. Except as set forth in Schedule
4.24.E and except for inventory in-transit, and purchased material in-transit,
no inventory constituting part of the Purchased Assets is located in any
warehouse facilities or customer locations. All of the personal property,
excluding motor vehicles, inventory in-transit and purchased material
in-transit, constituting part of the Purchased Assets is located at one of the
Purchased Real Estate or Purchased Leasehold Premises as described on Schedule
4.9 attached hereto.
4.24.F NO PRODUCTION OF ASBESTOS-CONTAINING PRODUCTS. To the best
knowledge of Seller, the Businesses have never produced or otherwise sold
products which contain asbestos or asbestos-containing coatings or insulation.
4.24.G FINAL SALES. All sales of inventory by the Businesses have been
and currently are made on terms of a final sale, and not on terms of consignment
or pursuant to which such inventory may be returned if not sold or utilized by
customers of the Businesses.
4.25 LIMITATIONS ON SELLER'S REPRESENTATIONS AND WARRANTIES.
4.25.1 The exceptions, modifications, descriptions and
disclosures in any Schedule attached hereto are made for all purposes
of this Agreement.
4.25.2 To the extent that Seller's representations and
warranties expressed herein are qualified by reference to Seller's or
the Companies' knowledge, such reference shall be limited to the
actual knowledge of the individuals set forth on Schedule 4.25.
30
<PAGE>
4.25.3 The representations and warranties set forth in this
Article 4.0 are the only representations and warranties made by UNR or
Leavitt Structural with respect to the Businesses and the Purchased
Assets. Except as specifically set forth herein, the Seller is
selling the Purchased Assets to the Purchaser "as is" and with all
faults.
4.26 TRUE AND COMPLETE COPIES. Copies of documents delivered and to be
delivered hereunder by Seller or Holco are and will be true and complete copies
of such documents.
4.27 BROKERS. UNR and the Companies have not employed any broker or
finder or incurred any liability for any brokerage fees, commissions or finders'
fees in connection with the transactions contemplated by this Agreement, except
J.P. Morgan Securities Inc., which UNR shall be solely responsible to
compensate.
4.28 ROHN PRODUCTS. The UNR-Rohn Division of the Seller does not
currently manufacture and sell tubing or pipe products other than the Rohn
Products, as defined in Exhibit C hereto.
5.0 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
In order to induce the Seller to enter into this Agreement and to
consummate the transactions contemplated hereunder, Purchaser makes the
following representations and warranties:
5.1 ORGANIZATION, POWER AND AUTHORITY OF THE PURCHASER. Purchaser is
a corporation duly organized and validly existing under the laws of its state of
incorporation, with full corporate power and authority to enter into this
Agreement and perform its obligations hereunder.
5.2 DUE AUTHORIZATION; BINDING OBLIGATION. The execution, delivery
and performance of this Agreement and all other agreements contemplated hereby
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action of Purchaser. This Agreement has
been duly executed and delivered by Purchaser and is a valid and binding
obligation enforceable in accordance with its terms. Neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will: (i) conflict with or violate any provision of the certificate of
incorporation or bylaws of Purchaser, or of any decree or order of any court or
administrative or other governmental body which is either applicable to, binding
upon or enforceable against Purchaser or requires any filing or authorization
under any applicable law, ordinance or regulation (other than as may be required
by the HSR Act), or (ii) result in any breach of or default under any mortgage,
contract, agreement, indenture, will, trust or other instrument which is either
binding upon or enforceable against Purchaser.
5.3 PURCHASE FOR INVESTMENT. The Purchaser is purchasing the Shares
for investment and not with a view to their distribution in whole or in part,
other than to any affiliate.
31
<PAGE>
5.4 INVESTIGATION BY PURCHASER. Purchaser has conducted an
investigation of the Purchased Assets and of the operations of the Businesses.
Purchaser has reviewed all of the documents, records, reports and other material
identified in the Exhibits and Schedules hereto, and is familiar with their
content. Purchaser acknowledges that it has been given access to and has
visited and examined the premises of the Businesses and is familiar with the
condition thereof. For the purpose of conducting these investigations,
Purchaser has employed the services of its own agents, representatives, counsel,
experts and consultants. Purchaser has relied upon information supplied by the
Seller as set forth herein and in the Exhibits and Schedules hereto and has not
relied upon any other information or statement, oral or written, not described
herein or not included in a Schedule attached hereto. Notwithstanding the
foregoing, nothing contained in this Section 5.4 shall affect or otherwise limit
Purchaser's ability to rely on the representations and warranties of Seller
contained in this Agreement.
5.5 BROKERS. Purchaser has not employed any broker or finder or
incurred any liability for any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated by this Agreement.
5.6 FINANCIAL RESOURCES. Purchaser has, and at the Closing, Purchaser
will have, the financial resources to consummate the transactions contemplated
hereby.
6.0 ADDITIONAL COVENANTS OF THE PARTIES
6.1 ALL REASONABLE EFFORTS. Each party hereto will use all reasonable
efforts to cause to be satisfied as soon as practicable and prior to the Closing
Date all of the conditions to its respective obligations to consummate the sale
and purchase of the Purchased Assets. Each party hereto shall also execute
prior to or after the Closing Date such other documents or agreements and take
such other actions as may be reasonably necessary or desirable for the
implementation of this Agreement and the consummation of the transactions
contemplated hereby, and, specifically, Seller shall use all reasonable efforts
to obtain all consents and approvals necessary for the assignment to Purchaser
of the Purchased Contracts, the Madison County Leases, and such other contracts
and agreements related to the Businesses to be assigned to Purchaser pursuant to
this Agreement.
6.1.A HSR FILINGS. Each party hereto will (i) take all actions necessary
to make the filings required of it or its affiliates under the HSR Act with
respect to the transactions contemplated by this Agreement, (ii) comply with any
requests for additional information received by such party or its affiliates
from the Federal Trade Commission or Antitrust Division of the Department of
Justice pursuant to the HSR Act, (iii) cooperate with the other party hereto in
connection with such other party's filings under the HSR Act and, (iv) request
early termination of the applicable waiting period under the HSR Act.
6.2 CONDUCT OF BUSINESS PENDING THE CLOSING. From and after the
execution and delivery of this Agreement and until the Closing Date, except as
otherwise provided by the prior written consent of the Purchaser:
32
<PAGE>
6.2.1 the Seller will, and the Seller will cause Holco to,
conduct the business and operations of the Businesses in the manner in
which the same have heretofore been conducted and as described to the
Purchaser, and it will use all reasonable efforts to (i) preserve the
business organization of the Businesses intact, (ii) keep available to
the Purchaser the services of the employees and agents of the
Businesses, and (iii) preserve the relationships with the customers of
the Businesses, suppliers and others having dealings with the
Businesses;
6.2.2 the Seller will, and the Seller will cause Holco to,
maintain all of the properties of the Businesses in customary repair,
order and condition, reasonable wear and use and damage by unavoidable
casualty excepted, and will maintain insurance of such types and in
such amounts upon all of the properties of the Businesses and with
respect to the conduct of the operations of the Businesses as are in
effect on the date of this Agreement; and
6.2.3 the Seller will not, and the Seller will cause Holco
not to, (i) pay any bonus or increase the rate of compensation of any
of the employees of any of the Businesses other than as required under
any collective bargaining agreement listed in Schedule 6.7.7; (ii)
sell or transfer any of the assets of any of the Businesses other than
in the ordinary course of business; (iii) make or obligate themselves
to make capital expenditures with respect to the Businesses
aggregating more than $500,000; (iv) with respect to the operations of
any of the Businesses, incur any material obligations or liabilities
or enter into any material transaction; (v) mortgage, pledge or
encumber (or permit any lien to attach to) any properties or assets of
the Businesses (other than purchase money security interests incurred
in connection with any purchase of properties or assets for use in the
Businesses); (vi) other than in the ordinary course of business, amend
or terminate any Material Agreement or any license or permit relating
to the Businesses; (vii) make any material change in any employee
benefit plans, except as required by law and except that Seller may
terminate the UNR Employees' Profit Sharing and 401(k) Plan, UNR
Industries, Inc. Supplemental Executive Retirement Plan, November
1993, prior to the Closing Date; (viii) increase or modify any
compensation or severance benefit payable to any employee of the
Businesses; (ix) incur any material changes in sales of inventory to
affiliates or divisions of UNR except as may be required by business
conditions of such affiliates or divisions; or (x) enter into any
other agreement, course of action or transaction material to the
Businesses except in the ordinary course of business.
6.2.4 Notwithstanding anything to the contrary in this
Section 6.2, Seller may take such action as is necessary to cancel or
reconcile intercompany accounts, as contemplated by Section 3.2.7.A
hereof, so long as such action does not involve distributing what
would otherwise be Purchased Assets.
33
<PAGE>
6.3 ACCESS TO THE PROPERTIES AND RECORDS OF THE BUSINESSES.
6.3.1 From and after the execution and delivery of this
Agreement, the Seller will, and the Seller will cause Holco to, afford
to the representatives of the Purchaser access, during normal business
hours and upon reasonable notice, to the premises of the Businesses
sufficient to enable the Purchaser to inspect the Purchased Assets and
assets and properties of the Companies, and furnish to such
representatives during such period all such information relating to
the foregoing investigation as the Purchaser may reasonably request.
6.3.2 From and after the Closing, Seller will make available
to the representatives of the Purchaser access, during normal business
hours and upon reasonable notice, to the financial statements and
records of the Businesses and work papers of Seller's independent
auditors with respect to audits performed on the financial statements
of the Businesses and the financial statements of the Seller to the
extent reasonably requested by Purchaser to enable Purchaser to
prepare audited financial statements relating to the Businesses for
such periods and in such form as Purchaser reasonably determines is
required for purposes of Purchaser's filings under applicable
securities laws.
6.3.3 To the extent any document containing information
about the Businesses constitutes an Excluded Asset pursuant to Section
1.3.4 and is reasonably necessary to or requested by Purchaser in
connection with its operation of the Businesses after the Closing,
Seller shall make such document and/or information available to
Purchaser and its representatives during normal business hours of
Seller upon prior written notice by Purchaser. Purchaser shall be
permitted to make copies of any such documentation and/or information
made available to Purchaser pursuant to this Section 6.3.3 to the
extent such documentation and/or information pertains to the
Businesses.
6.3.4 The Purchaser will hold in strict confidence all
documents and information concerning the Seller and/or the Businesses
furnished at any time by Seller or Holco, as and to the extent
provided under Section 11.3.A hereof.
6.4 NO DISCLOSURE. Neither party hereto will, prior to the Closing
Date, disclose the existence of or any term or condition of this Agreement to
any person or entity without the prior written consent of the other party,
except that such disclosure may be made (i) to any person to whom such
disclosure is necessary in order to satisfy any of the conditions to the
consummation of the purchase of the Shares and Purchased Assets which are set
forth in this Agreement, and (ii) to the extent the party making such disclosure
believes in good faith that such disclosure is required by law or any rules of
any securities exchange on which the stock of such party or its affiliates are
traded, it being understood that each party shall be entitled to issue such
press releases as it deems appropriate under such laws and rules (in which case,
such party will consult with the other party prior to making such disclosure).
34
<PAGE>
6.5 BULK SALES LAW. The Purchaser waives compliance with the bulk
sales law of any applicable state in connection with the transactions
contemplated by this Agreement.
6.6 EXPENSES. Purchaser, on the one hand, and Seller, on the other
hand, shall each bear its own respective expenses incurred in connection with
this Agreement and in connection with all obligations required to be performed
by each of them under this Agreement.
6.7 EMPLOYEE MATTERS.
6.7.1 Purchaser shall offer at will employment, on terms and
conditions substantially equivalent to those currently in effect,
including the compensation levels set forth in Schedule 6.7.1 hereto,
effective on the Closing Date, to all regular full time and part time
employees of the Businesses as of the Closing Date (including
employees on short term disability when the short term disability
period terminates but excluding employees covered by collective
bargaining agreements). Those employees who accept employment with
the Purchaser are referred to herein as the "Continued Employees."
6.7.2 From the Closing Date until December 31, 1996,
Purchaser (or an affiliate thereof) shall provide at its sole expense,
for the benefit of the Continued Employees, the benefit plans,
policies and procedures set forth in Schedule 6.7.2. Purchaser, in its
sole discretion, shall provide the benefit plans, policies and
procedures set forth in Schedule 6.7.2 for such time period by either
assuming the sponsorship of the existing benefit plans, policies and
procedures set forth in Schedule 6.7.2 or establishing mirror image
plans, policies and procedures which shall become effective
immediately following the Closing Date. Purchaser agrees that the
medical and disability benefits provided will contain a waiver of any
pre-existing condition exclusion for Continued Employees. From and
after January 1, 1997, Purchaser shall provide benefit plans, policies
and procedures to the Continued Employees that are on such terms as
Purchaser deems appropriate, subject to applicable provisions of
collective bargaining agreements as in effect from time to time.
Purchaser shall give each Continued Employee credit for accrued
vacation to the extent accrued on the Closing Statement.
6.7.3 Purchaser and Seller agree that, except as
specifically provided otherwise in this Agreement and except for any
employee-paid premiums for continuation of coverage required to be
offered by UNR or the Companies under the terms of an applicable
employee benefit plan of any such employer or otherwise required by
law, the provision of employee benefits to Continued Employees
including, without limitation, the employee benefits set forth on
Schedule 6.7.2 on and after the Closing Date shall be the sole
responsibility of Purchaser. Seller shall be fully responsible for
health-care and disability benefits incurred prior to the Closing
Date, including costs for employees hospitalized or on disability on
the Closing Date, and, except as specifically provided otherwise in
this Agreement, such other benefits to the extent accrued and vested
on or before the Closing Date. Notwithstanding the foregoing, Seller
shall be responsible for COBRA liabilities
35
<PAGE>
and obligations under Section 4980B of the Code and Sections 601-608 of
ERISA with respect to any individuals who incurred or incur a "qualifying
event" (within the meaning of Section 603 of ERISA) under an applicable
employee benefit plan of UNR or the Companies prior to the Closing Date.
6.7.4 If Purchaser terminates any Continued Employee within
12 months after the Closing Date for any reason other than
disciplinary reasons or unsatisfactory performance, he or she shall be
entitled to receive severance benefits (based on such employee's
aggregate years of employment with the Seller or Holco and Purchaser)
on terms and conditions no less favorable than those offered by Seller
or Holco to their similarly situated employees, and the cost of such
severance benefits shall be borne by Purchaser.
6.7.5 Except as specifically provided otherwise in this
Agreement, neither Purchaser nor Seller will solicit for employment,
for a period of 24 months after the Closing Date, any of the employees
of the other party.
6.7.6 Purchaser agrees to assume UNR's obligations under the
Change of Control Agreements between UNR and (i) Roy Herman, dated
September 15, 1993, (ii) William Spanos, dated September 15, 1993,
(iii) Parry Katsafanas, dated January 31, 1996, and (iv) David
Lichtfuss, dated January 31, 1996, and to indemnify and hold Seller
harmless from any amount UNR may be required to expend as a
consequence of such agreements; provided, however, that Purchaser
shall not assume any liability of Seller under any of such Change of
Control Agreements to the extent arising as a result of or otherwise
relating to any actions by Seller or any of its affiliates prior to
the Closing other than in connection with the transactions
contemplated by this Agreement, and, provided, further, that Purchaser
shall not assume any liability of Seller with respect to any Change of
Control Agreement between UNR and any of such persons if Purchaser
offers employment to such person in accordance with Section 6.7.1
hereof and the terms of such Change of Control Agreements and such
person refuses to accept such offer of employment by Purchaser.
6.7.7 Purchaser agrees to assume the obligations of Seller
under and be substituted for the Seller as a party to the collective
bargaining agreements listed on Schedule 6.7.7 hereto; provided,
however, that, except with respect to Unfunded Pension Plan
Obligations which are to be assumed by Purchaser as contemplated by
Section 2.3.8 hereof and for accrued vacation up to the Closing Date
to the extent reflected on the Closing Statement, Purchaser's
assumption of the obligations of Seller under such collective
bargaining agreements shall relate only to those liabilities and
obligations under the collective bargaining agreements that relate to
periods on or after the Closing Date.
6.7.8 Purchaser agrees to take the following actions with
respect to the multi-employer pension benefit plans ("Pension Plans")
to which UNR or the
36
<PAGE>
Companies have made contributions prior to the Closing pursuant to the
collective bargaining agreements shown in Schedule in 6.7.7:
(i) to continue to contribute under the terms of the Pension
Plans for substantially the same number of contribution base units for
which UNR or the Companies had an obligation to contribute immediately
prior to the Closing;
(ii) unless an exemption or variance is available pursuant
to regulation or is obtained in accordance with Pension Benefit
Guaranty Corporation procedures, the Purchaser shall provide to each
of the Pension Plans for a period of five plan years, commencing with
the first plan year of each of the Pension Plans beginning after the
Closing, a bond issued by a surety company that is an acceptable
surety for purposes of Section 412 of ERISA in the amount described
below, or Purchaser shall establish an escrow fund held by a bank or
similar financial institution satisfactory to the respective Pension
Plan in the amount described below. Such amount shall be equal to the
greater of (x) the average annual contributions required to be made by
UNR or the Companies for three plan years of each of the Pension Plans
next preceding the respective plan year in which the Closing occurs,
or (y) the annual contribution UNR or the Companies were required to
make under the Pension Plans for the last plan year prior to the
respective plan year in which the Closing occurs, which bond or escrow
shall provide for payment to the respective Pension Plan if Purchaser
withdraws from the Pension Plan or fails to make a contribution to the
Pension Plans when due at any time during the first five plan years
beginning after the Closing;
(iii) unless an exemption or variance is available pursuant
to regulation or is obtained in accordance with Pension Benefit
Guaranty Corporation procedures, and otherwise subject to the
provisions of paragraph (iv) below, Seller agrees that if the
Purchaser withdraws from any of the Pension Plans in a complete
withdrawal or a partial withdrawal (as defined in Sections 4203 and
4205 of ERISA) with respect to operations of the Businesses for which
contributions under paragraph (i) were required during the first five
plan years described in paragraph (ii) above, the Seller shall be
secondarily liable for any withdrawal liability it would have had to
that Pension Plan with respect to such operations (but for Section
4204 of ERISA) if the liability of the Purchaser with respect to that
Pension Plan is not paid;
(iv) Seller's secondary liability for any withdrawal
incurred by the Purchaser as a result of the Purchaser's agreement to
contribute to any Pension Plan pursuant to paragraph (i) above, shall
be limited to an amount equal to the payment to that Pension Plan that
would have been due from Seller but for the undertakings of the
Purchaser and Seller pursuant to paragraphs (i), (ii) and (iii) above;
(v) if, notwithstanding the full cooperation of Seller,
Section 4204 of ERISA does not operate to shield Seller from
withdrawal liability resulting from the
37
<PAGE>
transfer of assets to Purchaser, and such withdrawal liability is charged
to Seller, Purchaser will indemnify Seller for such withdrawal liability;
(vi) if Seller incurs any secondary withdrawal liability to
the Pension Plans with respect to the employees that are transferred
to Purchaser, Purchaser will indemnify Seller for such secondary
withdrawal liability; and
(vii) UNR agrees that it will request, and use commercially
reasonable efforts to obtain prior to the Closing Date, a withdrawal
liability report from the administrator of the Electrical Contractors'
Association and Local Union 134 I.B.E.W. Joint Pension Trust of
Chicago, Pension Plan No. 2 ("Electrical Contractors' Plan") showing
the withdrawal liability of UNR and/or the Companies as of the Closing
Date or a date within 30 days prior to the Closing Date. In the event
UNR is unable to obtain such withdrawal liability report prior to the
Closing Date or to the extent the withdrawal liability of UNR and/or
the Companies as reflected on such report exceeds $55,000, Seller
agrees to indemnify Purchaser against any withdrawal liability it or
any of its affiliates incur under the Electrical Contractors' Plan to
the extent such withdrawal liability as reflected in such report
exceeds $55,000, notwithstanding the preceding provisions of this
Section 6.7.8 hereof.
6.7.9 Seller agrees that, from and after the Closing, Seller
shall remain fully responsible for and shall fully satisfy or cause to
be satisfied all workers' compensation claims asserted by employees of
the Businesses (whether employed by UNR, Leavitt Structural or Holco)
to the extent such claim arises out of or results from any event
occurring prior to the Closing Date, regardless of whether such claim
is asserted prior to or on or after the Closing Date;
6.7.10 Notwithstanding anything contained in this Section
6.7, to the extent any provisions of this Section 6.7, as related to
employees governed by the collective bargaining agreements set forth
on Schedule 6.7.7 hereto, contradict or otherwise are inconsistent
with any terms, provisions or requirements under such collective
bargaining agreements, Purchaser's obligations under this Section 6.7
shall be deemed to be modified to the extent necessary to enable
Purchaser to comply with the applicable provisions of any such
collective bargaining agreements with respect to the employees covered
thereby, and any such modification or deviation from the terms of this
Section 6.7 as a result of such actions by Purchaser shall not be
deemed a breach or violation of this Agreement.
6.7.11 Seller agrees to pay within five days after
determination of the final Closing Statement, the amounts owing
employees or former employees of the Businesses under the UNR
Industries, Inc. Key Management Incentive
38
<PAGE>
Variable Compensation Plan for periods through the Closing Date, calculated
on a pro rata basis for 1996 based on the financial performance of the
Businesses from January 1, 1996 to the Closing Date.
6.7.12 Purchaser agrees to administer on Seller's behalf
claims which may be made under the Evanston Retirees UNARCO Health
Service Plan, provided, that, (i) Seller agrees to reimburse Purchaser
for its out-of-pocket expenses and to indemnify Purchaser for any
liabilities it may incur thereby, and Seller and Purchaser agree to
negotiate in good faith an agreement to compensate Purchaser for such
services if Purchaser so requests and to permit Purchaser to terminate
such services on 60 days notice to Seller in the absence of such an
agreement and (ii) Purchaser is not assuming and shall not assume or
be obligated for any liability of Seller with respect to any amounts
payable under or pursuant to such Plan.
6.8 OBLIGATION TO NOTIFY. Each party shall have the continuing
obligation until the Closing promptly to notify the other party in writing with
respect to any matter hereafter arising or discovered which, if existing or
known at the date of this Agreement, would have been required to be set forth or
described in this Agreement or the Schedules or other attachments annexed
hereto. To the extent any such matter causes or will cause any covenant under
this Agreement to be breached, or that renders or will render untrue any
representation or warranty contained in this Agreement, the party whose
covenant, agreement, representation or warranty would be breached or rendered
untrue shall use commercially reasonable efforts to cure, before the Closing,
any violation or breach of any covenant, agreement, representation or warranty
made in this Agreement. Notwithstanding the foregoing, the obligations under
this Section 6.8 shall not apply with respect to any event, transaction or
circumstance of which a party has been notified by the other party pursuant
hereto or with respect to which both parties to this Agreement have actual
knowledge, and the failure by any party to notify the other party pursuant to
this Section 6.8 with respect to any matter hereafter arising or discovered
shall not affect such party's rights or obligations under Article 13 hereof.
6.9 USE OF UNR. Purchaser agrees to abandon use by the Businesses and
otherwise of all trademarks, trade names, service marks and symbols denoting or
connoting UNR, including, without limitation, UNR Industries, Inc. and UNR, as
promptly as practicable and in any event by six months following the Closing,
provided that Purchaser's rights in and to, and use of, the terms listed in part
II of Schedule 1.2.8 hereto shall not be affected by this covenant.
6.10 OTHER AGREEMENTS. Purchaser and Seller agree to use all
reasonable efforts to cause the rights of the Leavitt Division pursuant to the
PTO Agreements to continue after the Closing without imposing additional
liabilities on the Seller, provided, that, Purchaser and its affiliates shall
not be required to assume any liabilities that relate to conduct of the Seller
or the Businesses thereunder prior to the Closing or assume or otherwise become
a party to any existing agreement that reasonably may be expected to result in
obligations of Purchaser or its affiliates for any contributions or withdrawal
liability under or with respect to the CTD Pension Fund to
39
<PAGE>
the extent related to or attributable to any period prior to the Closing.
Seller also agrees that Purchaser shall be entitled to use of the Chicago Bulls
Tickets on an equal sharing basis with Seller.
7.0 CONDITIONS TO THE OBLIGATION OF THE PURCHASER
The obligation of the Purchaser to purchase the Shares and Purchased Assets
shall be subject to the fulfillment at or prior to the Closing Date of each of
the following conditions:
7.1 ACCURACY OF THE SELLER'S REPRESENTATIONS AND WARRANTIES AND
COMPLIANCE BY THE SELLER WITH ITS OBLIGATIONS. The representations and
warranties of the Seller contained in this Agreement shall have been true and
correct in all material respects at and as of the date hereof, and they shall be
true and correct in all material respects at and as of the Closing Date with the
same force and effect as though made at and as of that time. The Seller shall
have performed and complied in all material respects with all of its obligations
required by this Agreement to be performed or complied with at or prior to the
Closing Date. Seller shall have delivered to the Purchaser a certificate, dated
as of the Closing Date and signed by an executive officer of Seller, certifying
that such representations and warranties are thus true and correct in all
material respects and that all such obligations have been thus performed and
complied with in all material respects.
7.2 CERTIFIED RESOLUTIONS. Seller shall have delivered to the
Purchaser copies of resolutions adopted by the board of directors and
stockholders of each of UNR and Leavitt Structural authorizing the transactions
contemplated by this Agreement, certified in each case as of the Closing Date by
a secretary or assistant secretary.
7.3 OPINION OF COUNSEL. The Purchaser shall have received an opinion
dated the Closing Date from the general counsel for the Seller, in form and
substance as set forth in Exhibit A attached hereto.
7.4 RECEIPT OF NECESSARY CONSENTS.
7.4.1 All required consents or approvals of third parties
necessary to convey to Purchaser all of the Purchased Assets as
contemplated by this Agreement, the absence of which would materially
adversely affect Purchaser's rights hereunder, shall have been
obtained and shown by written evidence reasonably satisfactory to the
Purchaser; provided, however, that, except as provided in Section
7.4.2 hereof, if Seller is unable to obtain any such consents or
approvals on reasonable commercial terms by the Closing Date, this
condition shall be satisfied if Seller, by acting as agent for
Purchaser or participating in any other reasonable and lawful
arrangement, is able to put the Purchaser in the same position in all
material respects as if such consents or approvals had been obtained,
in the manner as contemplated by Section 3.6 hereof.
40
<PAGE>
7.4.2 Notwithstanding the provisions of Section 7.4.1
hereof, (i) all waiting periods applicable to this Agreement and the
transactions contemplated hereby under the HSR Act shall have expired
or been waived and (ii) Seller shall have obtained and delivered to
Purchaser the estoppel certificate and consent to assignment, each
duly executed by Landlord, relating to the Madison County Leases, as
contemplated by Section 3.2.4.A hereof.
7.5 TITLE INSURANCE. Purchaser shall have received a commitment for
the issuance of an ALTA owner's title insurance policies (with costs to be
shared equally by Purchaser and Seller) with respect to the Purchased Real
Estate, subject only to those items set out in Schedule 4.9 and the customary
exceptions in the policy.
7.6 NO ADVERSE ORDER. There shall not be any order of any court or
governmental authority restraining, prohibiting or invalidating the sale of the
Shares and Purchased Assets to the Purchaser or any other material transaction
contemplated hereby, or materially and adversely affecting the right of the
Purchaser to own the Shares or own, operate or control the Purchased Assets or
the Businesses as currently conducted.
7.7 NO ADVERSE CHANGE. Since December 31, 1995, there shall not have
occurred any events that, individually or in the aggregate, have had, or could
reasonably be expected to have, a material adverse effect, provided, that,
matters occurring since December 31, 1995, as disclosed in the Schedules hereto,
shall not, individually or in the aggregate, be deemed to have had or reasonably
be expected to have a material adverse effect, but may be aggregated with other
matters not so disclosed for purposes of determining whether the condition set
forth in this Section 7.7 shall have been satisfied as of the Closing.
8.0 CONDITIONS TO OBLIGATIONS OF THE SELLER
The obligations of the Seller to sell the Shares and Purchased Assets shall
be subject to the fulfillment at or prior to the Closing Date of each of the
following conditions:
8.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH
OBLIGATIONS. The representations and warranties of Purchaser contained in this
Agreement shall have been true and correct in all material respects at and as of
the date hereof, and they shall be true and correct in all material respects at
and as of the Closing Date with the same force and effect as though made at and
as of that time. Purchaser shall have performed and complied in all material
respects with all of its obligations required by this Agreement to be performed
or complied with at or prior to the Closing Date. Purchaser shall have
delivered to the Seller a certificate, dated as of the Closing Date and signed
by an executive officer, certifying that such representations and warranties are
true and correct in all material respects and that all such obligations have
been thus performed and complied with in all material respects.
8.2 OPINION OF COUNSEL. The Seller shall have received an opinion,
dated the Closing Date, from Winstead Sechrest & Minick P.C., counsel for
Purchaser, in form and substance as set forth in Exhibit B attached hereto.
41
<PAGE>
8.3 CERTIFIED RESOLUTIONS. Purchaser shall have delivered to the
Seller a copy of a resolution adopted by its board of directors authorizing the
transactions contemplated by this Agreement, certified as of the Closing Date by
its secretary or assistant secretary.
8.4 NO ADVERSE ORDER. There shall not be any order of any court
restraining, prohibiting or invalidating the sale of the Purchased Assets or
Shares to the Purchaser or any other material transaction contemplated hereby.
8.5 HSR ACT. All waiting periods applicable to this Agreement and the
transactions contemplated hereby under the HSR Act shall have expired or been
waived.
9.0 CERTAIN ACTIONS AFTER THE CLOSING
9.1 PURCHASER TO ACT AS AGENT FOR SELLER. This Agreement shall not
constitute an agreement to assign any claim, contract, license, lease,
commitment, sales order or purchase order if any attempted assignment of the
same without the consent of the other party thereto would constitute a breach
thereof or in any way affect the rights of the Seller thereunder and, if after
the Seller shall have fulfilled its duties under Section 6.1 hereof with respect
to using reasonable efforts to obtain such required consents, such consents
shall not have been obtained. If such consent is not obtained or if any
attempted assignment would be ineffective or would affect Seller's rights
thereunder so that the Purchaser would not in fact receive all such rights, then
the Purchaser shall act as the agent for Seller in order to obtain for the
Purchaser the benefits thereunder.
9.2 PURCHASER APPOINTED ATTORNEY FOR SELLER. Effective at the Closing
Date, the Seller hereby constitutes and appoints the Purchaser, its successors
and assigns, the true and lawful attorney of Seller, in the name of either the
Purchaser or Seller (as the Purchaser shall determine in its sole discretion)
but for the benefit and at the expense of the Purchaser (except as otherwise
herein provided), (i) to institute and prosecute all proceedings which the
Purchaser may deem proper in order to collect, assert or enforce any claim,
right or title of any kind in or to the Purchased Assets as provided for in this
Agreement; (ii) to defend or compromise any and all actions, suits or
proceedings in respect of any of the Purchased Assets, and to do all such acts
and things in relation thereto as the Purchaser shall deem advisable; and (iii)
to take all action which the Purchaser may reasonably deem proper in order to
provide for the Purchaser the benefits under any of the Purchased Assets where
any required consent of another party to the sale or assignment thereof to the
Purchaser pursuant to this Agreement shall not have been obtained. The
Purchaser shall be entitled to retain for its own account any amounts collected
pursuant to the foregoing powers, including any amounts payable as interest in
respect thereof.
10.0 PRODUCT WARRANTY AND LIABILITY CLAIMS
10.1 PRODUCT WARRANTY AND LIABILITY CLAIMS; COOPERATION IN
LITIGATION. As to any product warranty or liability claims asserted against
Purchaser or Seller for products of any of the Businesses shipped after the
Closing, Purchaser shall be fully responsible for their defense and resolution.
As to product warranty and liability claims for products of any of the
Businesses shipped before the Closing and first asserted against Purchaser or
Seller or Holco after the
42
<PAGE>
Closing, Seller shall be fully responsible for their defense and resolution
except to the extent an accrual therefor is included in the Closing Statement as
contemplated by Section 3.4.1(f), with respect to which Purchaser shall be
responsible to the extent of such accrual; provided, however, that, with respect
to any inventory returned to Purchaser in connection with the assertion of any
such product warranty or liability claim, Purchaser, at its option, may either
deliver to Seller the scrap value of such inventory returns to Purchaser or
credit the scrap value of such inventory against amounts then owing by Seller to
Purchaser pursuant to this Agreement. As to such claims first asserted before
the Closing, Seller shall be solely responsible. Purchaser and Seller shall
each cooperate with the other in the defense of any such action and in the
prosecution or defense of any other actions affecting the Businesses to the
extent reasonably so requested.
11.0 MISCELLANEOUS
11.1 BROKERS' COMMISSION. The Purchaser will indemnify and hold
harmless the Seller from the commission, fee or claim of any person, firm or
corporation employed or retained or claiming to be employed or retained by the
Purchaser to bring about, or to represent it in, the transactions contemplated
hereby. The Seller will indemnify and hold harmless the Purchaser from the
commission, fee or claim of any person, firm or corporation employed or retained
or claiming to be employed or retained by the Seller to bring about, or to
represent them in, the transactions contemplated hereby.
11.2 AMENDMENT AND MODIFICATION. The parties hereto may amend, modify
and supplement this Agreement in such manner as may be agreed upon by them in
writing.
11.3 TERMINATION.
11.3.1 Anything to the contrary herein notwithstanding, this
Agreement may be terminated and the transactions contemplated hereby
may be abandoned at any time prior to the Closing:
11.3.1.1 by the mutual written consent of the
parties hereto;
11.3.1.2 by the Purchaser or the Seller if there
is an order of any court or other governmental agency
or authority restraining, prohibiting or invalidating
the sale of the Purchased Assets or Shares to the
Purchaser or any other material transaction
contemplated hereby, or, in the case of the
Purchaser, which would materially and adversely
affect the right of the Purchaser to own, operate or
control the Purchased Assets and such order is not
dismissed, overturned or otherwise vacated within 30
days after the entry thereof; or
43
<PAGE>
11.3.1.3 by either party in the event of the
material breach by the other party of any provisions
of this Agreement, which breach is not remedied by
the breaching party within 30 days after receipt of
notice thereof from the terminating party; or
11.3.1.4 by Seller or Purchaser if the Closing has
not taken place by August 31, 1996, provided that the
failure of the Closing to have occurred on or before
such date shall not have resulted from the breach by
the terminating party of any representation,
warranty, covenant or agreement of such party
contained in this Agreement.
If this Agreement is terminated pursuant to clauses 11.3.1.1 or 11.3.1.2 of this
paragraph 11.3.1, no party shall have any liability for any costs, expenses,
loss of anticipated profit or any further obligation for breach of warranty or
otherwise to any other party to this Agreement. Any termination of this
Agreement pursuant to clauses 11.3.1.3 or 11.3.1.4 of this paragraph 11.3.1
shall be without prejudice to any other rights or remedies of the respective
parties hereof, including any rights against any other party for a breach hereof
occurring prior to termination of this Agreement.
11.3.A CONFIDENTIALITY.
11.3.A.1 From the date hereof until the earlier to occur of
the Closing Date or the termination of this Agreement pursuant to
Section 11.3 hereof, each of Purchaser and Seller will refrain, and
will cause its respective affiliates, officers, directors, employees,
agents, and other representatives to refrain, from disclosing to any
other person or entity any documents or information concerning the
other party hereto (including, with respect to Seller, the Companies
and the Businesses) acquired by it in connection with this Agreement
or the transactions contemplated hereby unless (i) such disclosure is
compelled by judicial or administrative process or by other
requirements of law (including in connection with obtaining necessary
insurance regulatory approvals) and notice of such disclosure is
furnished to such other party hereto; (ii) either party hereto deems
it advisable (upon advice of such party's legal counsel) to disclose
any such documents or information in connection with the requirements
of any securities law; or (iii) such documents or information can be
shown to have been (A) previously known by the party hereto receiving
such documents or information, (B) in the public domain through no
fault of such receiving party, or (C) later acquired by such receiving
party from other public sources.
11.3.A.2 If this Agreement is terminated pursuant to Section
11.3 hereof, Purchaser shall continue to adhere to the terms of the
Confidentiality Agreement dated February 8, 1996, between Purchaser
and J.P. Morgan Securities, Inc., as
44
<PAGE>
agent for Seller, with respect to information concerning Seller, the Companies
or the Businesses obtained by Purchaser in connection with this Agreement or
investigations or evaluations concerning the transactions contemplated hereby.
11.3.A.3 If the Closing occurs, following the Closing Date
(1) Seller will refrain, and will cause its affiliates, officers,
directors, employees, agents and other representatives to refrain,
from disclosing to any person or entity any information regarding the
Companies, the Businesses or the transactions contemplated hereby
unless (i) such disclosure is compelled by judicial or administrative
process or by other requirements of law and notice of such disclosure
is furnished to Purchaser; (ii) the Seller deems it advisable (upon
advice of legal counsel to Seller) to disclose any such documents or
information in connection with the requirements of any securities law;
or (iii) such documents or information can be shown to have been (A)
in the public domain through no fault of Seller, or (B) later acquired
by Seller from other public sources and (2) Purchaser will refrain,
and will cause its officers, directors, employees, agents and other
representatives to refrain, from disclosing to any other person or
entity any documents or information concerning the business or
operations of Seller other than to the extent relating to the
Companies or the Businesses unless (i) such disclosure is compelled by
judicial or administrative process or by other requirements of law and
notice of such disclosure is furnished to Seller; (ii) the Purchaser
deems it advisable (upon advice of legal counsel to Purchaser) to
disclose any such documents or information in connection with the
requirements of any securities law; or (iii) such documents or
information can be shown to have been (A) in the public domain through
no fault of Purchaser, or (B) later acquired by Purchaser from other
public sources.
11.3.A.4 The parties hereto acknowledge and agree that (i) a
breach of any of the terms or provisions of this Section 11.3.A would
cause irreparable damage to the non-breaching party for which adequate
remedy at law is not available; and (ii) the non-breaching party will
be entitled as a matter of right to obtain, without posting any bond
whatsoever, an injunction, restraining order, or other equitable
relief to restrain any threatened or further breach of this Section
11.3.A, which right will not be exclusive but will be cumulative and
in addition to any other rights and remedies available at law or in
equity.
11.3.A.5 At the Closing, Seller will assign to Purchaser the
non-exclusive right to enforce the rights of Seller and its affiliates
under each of the confidentiality agreements between Seller or its
affiliates (directly or indirectly through J.P. Morgan Securities,
Inc., acting as agent for Seller) and prospective purchasers of the
Companies and the Businesses.
11.4 BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of (i) the parties hereto and their respective
successors, assigns, heirs and legal representatives and (ii) all affiliates of
Seller to whom all or substantially all of the assets of the UNR-Rohn Division
of UNR are transferred or assigned, either as one or a series of transactions.
No rights or obligations hereunder may be assigned by Seller or Purchaser
without the prior
45
<PAGE>
written consent of the other, provided that Purchaser may assign its rights and
obligations hereunder to a wholly-owned direct or indirect subsidiary of
Purchaser without Seller's prior written consent if Purchaser irrevocably and
unconditionally guarantees the performance of all the assignee's obligations
under this Agreement, subject only to the terms and conditions of this
Agreement.
11.5 ENTIRE AGREEMENT. This Agreement, the Exhibits and Schedules
attached hereto and the confidentiality agreement between the Purchaser and J.P.
Morgan Securities Inc. dated February 8, 1996 contain the entire agreement of
the parties hereto with respect to the purchase of the Purchased Assets and the
other transactions contemplated herein, and supersede all prior understandings
and agreements of the parties with respect to the subject matter hereof. Any
reference herein to this Agreement shall be deemed to include the Schedules and
Exhibits attached hereto.
11.6 HEADINGS. The descriptive headings in this Agreement are inserted
for convenience only and do not constitute a part of this Agreement.
11.7 EXECUTION IN COUNTERPART. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original.
11.8 NOTICES. Any notice, request, information or other document to be
given hereunder to any of the parties by any other party shall be in writing and
delivered to the parties at the following addresses (or to such other address as
a party may have specified by notice to the other party pursuant to this
provision):
If to Seller, addressed to:
UNR Industries, Inc.
332 South Michigan Avenue
Chicago, Illinois 60604
Attn: General Counsel
Fax: 312/341-0349
with a copy to:
Bell, Boyd & Lloyd
Three First National Plaza
70 West Madison Street
Suite 3300
Chicago, Illinois 60602
Attn: John H. Bitner, Esq.
Fax: 312/372-2098
46
<PAGE>
If to Purchaser, addressed to:
Chase Brass Industries, Inc.
State Route 15
P.O. Box 152 (do not use for Federal Express or other
courier service)
Montpelier Ohio 43543-0152
Attention: Corporation Secretary
Fax: 419/485-8150
with a copy to:
Winstead Sechrest & Minick P.C.
5400 Renaissance Tower
1201 Elm Street
Dallas, Texas 75270-2199
Attn.: Rodney L. Moore, Esq.
Fax: 214/745-5390
Any such notice shall be deemed given (i) when receipted for by the party to
whom addressed, in the case of personal delivery; (ii) the next business day
following service by overnight mail or delivery service; (iii) the third
business day following the deposit in the U.S. mail, postage prepaid, registered
or certified mail, return receipt requested; or (iv) upon receipt of electronic
facsimile transmission, provided that a copy of such facsimile notice shall
simultaneously be sent to the address by certified or registered mail, return
receipt requested.
11.9 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY RIGHT.
This Agreement shall be governed by and construed in accordance with the
internal laws of the State of Delaware applicable to contracts made and to be
performed therein without regard to the conflicts of laws principles thereof.
Each of the parties to this Agreement irrevocably consents to the exclusive
jurisdiction and venue (and waives any inconvenient forum objection) of the
state and federal courts located in the State of Delaware for the purposes of
any court proceedings hereunder and to accept service of process by any means
specified in Section 11.8. EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY
WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING BROUGHT HEREUNDER.
11.10 LIMITATION ON RIGHTS OF OTHER PERSONS. Nothing expressed or implied
in this Agreement is intended or shall be construed to confer upon or give any
person, firm, corporation or entity other than the parties hereto any rights or
remedies under or by reason of this Agreement or any transaction contemplated
hereby, except as herein otherwise provided.
11.11 SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future laws effective during
the term of this Agreement, such provision shall be fully severable and this
Agreement shall be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part of this Agreement; and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be
47
<PAGE>
affected by the illegal, invalid, or unenforceable provision or by its severance
from this Agreement. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as part of this
Agreement a provision as similar in its terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.
11.12 TERMINATION OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. The
agreements of the parties contained in Sections 6.4, 6.6, 11.1, 11.2, 11.3.A,
11.9, 11.11 and 14.0 shall survive the termination of this Agreement. All other
representations, warranties, agreements and covenants in or pursuant to this
Agreement shall not survive the termination of this Agreement.
11.13 CERTAIN DEFINITIONS. As used herein, the term "reasonable efforts"
means those commercially reasonable efforts which would be exerted by a
substantial business enterprise to accomplish the desired result, short of the
expenditure of funds disproportionate to the benefit derived; and the term
"affiliate" shall mean, with respect to a person or entity, any other person or
entity which, directly, or indirectly or through one or more intermediaries,
controls or is controlled by, or is under common control with, the person or
entity specified; and the term "material adverse effect" shall mean a material
adverse effect on (i) the business, financial condition or results of operations
of the Businesses, taken as a whole, or (ii) the validity or enforceability of
this Agreement or the ability of the Seller to perform its obligations under
this Agreement.
12.0 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
12.1 SURVIVAL.
12.1.1 Subject to Section 12.2 hereof and Article 13.0
hereof, the representations and warranties respectively made by Seller
and Purchaser in this Agreement, in the Schedules hereto, or in any
certificate required to be delivered pursuant to this Agreement will
expire on the Closing Date except that (i) the representations and
warranties of Seller set forth in Sections 4.3, 4.8, 4.10 and 4.21
hereof shall survive until the expiration of all applicable statutes
of limitations (including all periods of extension, whether automatic
or permissive), and (ii) the representations and warranties of Seller
set forth in Sections 4.6, 4.7 and 4.19 hereof shall survive until the
first anniversary of the Closing Date.
12.1.2 The covenants and agreements of Seller and Purchaser
that, by their terms, are to be complied with prior to Closing will
survive the Closing until the first anniversary of the Closing Date.
12.1.3 The covenants and agreements of Seller and Purchaser
contained in this Agreement, to the extent that, by their terms, they
are to be performed or complied with after the Closing, including,
without limitation, the indemnification agreements set forth in
Article 13.0 hereof, will survive the Closing until the later of (i)
the first anniversary of the Closing Date, or (ii) the expiration of
all applicable statutes of limitations (including all periods of
extension, whether automatic or permissive) affecting any such
covenant or agreement; PROVIDED,
48
<PAGE>
HOWEVER, that any such covenant or agreement that specifies a term or
period expiring before the expiration of all applicable statutes of
limitations will survive for a period of 90 days following the expiration
of such specified term or period.
12.2 PURSUIT OF CLAIMS. Any claim for indemnification for a breach of
a representation or warranty hereunder shall be brought within the survival
period specified in Section 12.1 hereof. If a claim for indemnification is made
in accordance with Article 13.0 hereof before the expiration of the applicable
survival period set forth in Section 12.1 hereof, then (notwithstanding such
survival period) the representation, warranty, covenant, or agreement applicable
to such claim will survive until the resolution of such claim by final,
nonappealable judgment or settlement, but only with respect to such claim.
13.0 INDEMNIFICATION AND PROCEDURES
13.1 INDEMNIFICATION.
13.1.1 BY SELLER. Each of UNR and Leavitt Structural,
jointly and severally, will defend, indemnify and hold harmless each
of the Purchaser and any of its officers, directors, employees,
representatives, agents, attorneys and affiliates (collectively, the
"Purchaser Indemnitees") from and against, and pay or reimburse the
Purchaser Indemnitees for, any and all liabilities, obligations,
commitments, losses, fines, penalties, sanctions, costs (including
court costs but excluding costs and expenses of in-house experts and
other personnel), expenses, interest, deficiencies or damages (whether
absolute, accrued, conditional or otherwise and whether or not
resulting from third-party claims), including reasonable out-of-pocket
expenses and reasonable fees and expenses of attorneys, accountants,
consultants and expert witnesses (collectively "Losses") resulting
from or arising out of:
(i) any inaccuracy of any representations or warranties made by Seller
in Sections 4.3, 4.6, 4.7, 4.10 and 4.21, of this Agreement (it
being understood that solely for purposes of this Article 13.0,
including, without limitation, the calculations of Losses pursuant
to Section 13.4.1, and notwithstanding anything to the contrary
contained in this Agreement, to determine if there has been an
inaccuracy of a representation or warranty and the Losses arising
from such an inaccuracy, such representation or warranty shall be
read as if it were not qualified by materiality, including,
without limitation, qualifications indicating accuracy "in all
material respects" or accuracy except to the extent the inaccuracy
will not have a "material adverse effect");
(ii) any failure of Seller to perform any covenant or agreement of Seller
hereunder or fulfill any other obligation of Seller in respect
hereof;
(iii) any and all Excluded Liabilities;
(iv) liabilities for Taxes as provided in Section 13.5;
49
<PAGE>
(v) the lawsuits and claims listed on Schedule 4.15 hereto, all other
lawsuits pending as of the Closing Date that would require
disclosure under Section 4.15 hereof, and any lawsuit or claim
that arises from conduct of any member of the Seller Group that
occurred prior to the Closing Date, in any such case whether such
Losses arise directly out of such lawsuits and claims, or from the
assertion of any other claims that arise from the matters alleged
in such lawsuits and claims, or from the assertion of claims for
contribution or indemnity in connection with such lawsuits and
claims under the Articles of Incorporation or Certificate of
Incorporation, as the case may be, or Bylaws of Leavitt Structural
or Holco (and the resolutions of the respective boards of
directors relating thereto) that arise from conduct that occurred
prior to the Closing Date;
(vi) Subject to Section 13.4.2, (A) any inaccuracy of the
representations and warranties contained in Section 4.19 (it being
understood that solely for purposes of this Article 13, including
without limitation the calculations of Losses pursuant to Section
13.4, and notwithstanding anything to the contrary contained in
this Agreement, to determine if there has been an inaccuracy of a
representation or warranty and the Losses arising from such an
inaccuracy, such representation or warranty shall be read as if it
were not qualified by materiality, including, without limitation,
qualifications indicating accuracy "in all material respects" or
accuracy except to the extent the inaccuracy will not have a
"material adverse effect"); and (B) subject to Section 13.3 below,
any of the following: (1) any noncompliance by UNR, Leavitt
Structural or Holco with any Environmental Law on or before the
Closing Date; (2) any Release or threatened Release of
Contaminants occurring, or environmental conditions existing, on
or before the Closing Date at, on, under, or above any of the
properties and assets of the Businesses (including the Purchased
Real Property and Purchased Leasehold Premises) or any other
property currently or previously owned, leased, operated or used
by UNR, Leavitt Structural or Holco in connection with the
Businesses; or (3) any generation, treatment, storage, disposal,
transportation, shipment offsite, or other management of a
Contaminant by UNR, Leavitt Structural or Holco on or before the
Closing Date (for purposes of this Section 13.1.1 (a)(vi), "UNR,"
the "Businesses," "Leavitt Structural" and "Holco" shall include
any predecessor or affiliate of each of them) (the indemnity
provided by this Section 13.1.1(vi) herein referred to as the
"Environmental Indemnity");
(vii) any claim made or liability asserted against the Purchaser (or any
of its affiliates) for contributions to the Chicago Truck Drivers,
Helpers and Warehouse Workers Union Pension Fund (the "CTD Pension
Fund"), except for any contributions that the Purchaser (or any of
its affiliates) might become obligated to make to the CTD Pension
Fund solely by virtue of the Purchaser (or any of its affiliates)
becoming
50
<PAGE>
a new contributing sponsor to the CTD Pension Fund pursuant to a
collective bargaining or other agreement that the Purchaser (or
any of its affiliates) enters into after the Closing Date; and
(viii) claims for health care and disability benefits (including retiree
benefits) related to current or former employees of UNR, Leavitt
Structural or Holco incurred prior to the Closing Date.
13.1.2 BY THE PURCHASER. The Purchaser will defend,
indemnify and hold harmless Seller and their officers, directors,
representatives, agents, attorneys and Affiliates (collectively, the
"Seller Indemnitees") from and against, and pay or reimburse the
Seller Indemnitees for, any and all Seller Losses resulting from or
arising out of:
(i) any breach by Purchaser of any representations or warranty of
Purchaser contained in Article 5.0 hereof;
(ii) any failure of the Purchaser to perform any covenant or
agreement of Purchaser hereunder or fulfill any other obligation of Purchaser in
respect hereof;
(iii) any and all Assumed Liabilities; and
(iv) any matter arising from the conduct of the Businesses after
the Closing.
13.2 INDEMNIFICATION PROCEDURES. Subject to Sections 13.3.2 and 13.5:
13.2.1 If a Purchaser Indemnitee or Seller Indemnitee (an
"Indemnitee") becomes aware of any matter that it believes is
indemnifiable pursuant to Section 13.1 and such matter involves (i)
any claim made against the Indemnitee by any person or entity other
than a Purchaser Indemnitee or a Seller Indemnitee or (ii) the
commencement of any action, suit, investigation, arbitration, or
similar proceeding against the Indemnitee by any person or entity
other than a Purchaser Indemnitee or a Seller Indemnitee (in either of
cases (i) or (ii), a "Third Party Claim"), the Indemnitee will give
the party obligated to indemnify the Indemnitee under this Article
13.0 (the "Indemnifying Party") prompt written notice of such claim or
the commencement of such action, suit, investigation, arbitration, or
similar proceeding, which notice must (A) provide (with reasonable
specificity) the basis on which indemnification is being asserted, (B)
set forth the actual or good-faith estimated amount of Losses for
which indemnification is being asserted, if known, and (C) be
accompanied by copies of all relevant pleadings, demands, and other
papers served on the Indemnitee; PROVIDED, HOWEVER, that the
Indemnitee's failure to provide the Indemnifying Party with such
notice shall not relieve the Indemnifying Party of its obligations
under this Article 13.0, except to the extent that such Indemnifying
Party's ability to defend against such claim has been prejudiced as a
result of such failure.
51
<PAGE>
13.2.2 The Indemnifying Party will have a period of 30 days
after the delivery of each notice required by Section 13.2.1 hereof
during which to respond to such notice. If the Indemnifying Party
notifies the Indemnified Party that the Indemnifying Party does not
dispute its liability to the Indemnified Party, and that the
Indemnifying Party desires to defend the Indemnified Party with
respect to the Third-Party Claim, the Indemnifying Party will be
obligated to compromise or defend (and will control the defense of)
such claim, at its own expense and by counsel chosen by the
Indemnifying Party; provided, however, that the Indemnified Party may,
at any time prior to its receipt of such notice from the Indemnifying
Party, file any motion, answer or other pleadings that the Indemnified
Party may deem necessary or appropriate to protect its interest or
those of the Indemnifying Party and not materially prejudicial to the
Indemnifying Party. The Indemnitee will cooperate fully with the
Indemnifying Party and counsel for the Indemnifying Party in the
defense against any such claim, and the Indemnitee will have the right
to participate in the defense of such claim and to employ its own
separate counsel, but the fees and expenses of such separate counsel
shall be at the expense of the Indemnitee unless any of the following
provisions shall apply: (i) to the extent the employment of such
counsel shall have been authorized in writing by the Indemnifying
Party in connection with the defense of such claim, action or
proceeding; (ii) there shall be defenses available to the Indemnitee
that are different from or additional to those available to the
Indemnifying Party and that the Indemnifying Party is not able to
assert on behalf of or in the name of the Indemnitee; or (iii) there
is a conflict of interest that would make it inappropriate under
applicable standards of professional conduct to have common counsel.
If clause (i), (ii) or (iii) in the immediately preceding sentence is
applicable, then the Indemnitee may employ separate counsel at the
expense of the Indemnifying Party to represent or defend it, but in no
event shall the Indemnifying Party be obligated to pay the fees and
disbursements of more than one such separate counsel for any one such
claim, action or proceeding in any one jurisdiction or fees in excess
of fees that are reasonable. If the Indemnifying Party fails to notify
the Indemnified Party that the Indemnifying Party does not dispute its
liability to the Indemnified Party and that the Indemnifying Party
desires to defend the Indemnified Party with respect to the
Third-Party Claim pursuant to this Section 13.2.2, or if the Indemnifying
Party gives such notice but fails diligently and promptly to defend
against or settle the Third-Party Claim, the Indemnitee will be free
to compromise or defend (and control the defense of), at the expense
of the Indemnifying Party such claim and to pursue such remedies as
may be available to the Indemnitee under applicable law.
13.2.3 Any compromise or settlement of any claim (whether
defended by the Indemnitee or by the Indemnifying Party) will require
the prior written consent of the Indemnitee and the Indemnifying Party
(which consent will not be unreasonably withheld).
13.2.4 If an Indemnitee becomes aware of any matter that it
believes is indemnifiable pursuant to Section 13.1 hereof and such
matter involves a claim
52
<PAGE>
made by a Purchaser Indemnitee or a Seller Indemnitee, the Indemnitee will
give the Indemnifying Party prompt written notice of such claim, which
notice must, subject to Section 13.3.2, (i) provide (with reasonable
specificity) the bases for which indemnification is being asserted, and
(ii) set forth the actual or good-faith estimated amount of Losses for
which indemnification is being asserted. The Indemnifying Party will have a
period of 30 days after the delivery of each notice required by this
Section 13.2.4 during which to respond to such notice. If the Indemnifying
Party accepts (in writing) full responsibility for the claim described in
such notice or does not respond within such 30-day period, the Indemnifying
Party will pay upon demand to the Indemnitee the actual or estimated amount
of Losses reflected in such notice. If the Indemnifying Party disputes such
claim, the Indemnifying Party and the Indemnitee agree to proceed in good
faith to negotiate a resolution of such dispute. If all such disputes are
not resolved through negotiations within 30 days after such negotiations
begin or if such negotiations are not initiated within 30 days after notice
is given, either the Indemnifying Party or the Indemnitee may initiate
litigation to resolve such disputes or otherwise exercise any rights it may
have at law or equity with respect to such disputes.
13.3 CERTAIN ENVIRONMENTAL MATTERS.
13.3.1 The covenant to indemnify under Section 13.1.1(vi)(B)
shall only apply to the extent that the Losses incurred by an
Indemnitee is "Reasonable Environmental Expense." For purposes of this
Agreement, an expense or cost shall be deemed a "Reasonable
Environmental Expense" to the extent such expense or other cost is
incurred to perform activities (including without limitation a site
investigation and remediation or other cleanup activities) which are
required by any order or directive of any governmental agency or
authority or reasonably necessary to (i) cause the environmental
condition giving rise to such Losses to be in compliance with
Environmental Law as in effect at the time of such remedial or other
cleanup action or (ii) comply with or to discharge a duty imposed
under applicable Environmental Law then in effect, in each case after
giving consideration to applicable Environmental Law then in effect
that allows the Indemnitee a range of options with significantly
differing costs as to how to comply with such Environmental Law or
discharge any such duty (including formally adopted risk based cleanup
standards for the presence of Contaminants in the soil, groundwater
and other environmental media) and such factors as (1) the magnitude
and likelihood of future Losses, (2) the potential disruption of, or
the imposition of restrictions on, the continued use of the property
in a manner consistent with its general land use type as of the
Closing, and (3) the likelihood of the occurrence or creation of an
imminent and substantial endangerment to human health or the
environment, in each case that may result in the event any of such
options were utilized.
Notwithstanding the preceding paragraph, with respect to any
Losses, a cost or expense shall not be deemed a Reasonable
Environmental Expense to the extent such cost or expense, or any duty
under Environmental Law to undertake
53
<PAGE>
the activity giving rise to such costs or expense, arises from any actual
or proposed demolition, remodeling, expansion, construction, replacement or
similar activity by or at the direction of the Purchaser or any affiliate
of the Purchaser in, on, under or within any such property that is not
otherwise required to be undertaken under any Environmental Law or other
applicable law.
13.3.2 (i) For a claim (an "Environmental Claim") to be a
Loss eligible for indemnification under Section 13.1.1(vi)(B), prior
to incurring costs or expenses for which indemnification is to be
sought, the Purchaser Indemnitee shall provide UNR with a notice (an
"Environmental Claim Notice") which notice shall include documentation
showing in reasonable detail the basis for Purchaser Indemnitee's
assertion that the proposed action and the costs and expenses are
Reasonable Environmental Expenses as contemplated by Section 13.3.1.
The Purchaser Indemnitee shall provide, and cause its representatives
to provide, UNR and UNR's authorized representatives access to and the
opportunity to review the subject of the Environmental Claim and any
studies, records, sampling data, cost estimates and other related
documents utilized by the Purchaser Indemnitee in connection with
establishing the Environmental Claim. Unless UNR delivers written
notice to the Purchaser Indemnitee prior to the 30th day following the
date on which such Environmental Claim Notice is deemed given pursuant
to Section 11.8 hereof that UNR disputes its liability to indemnify
the Indemnitee with respect to all or part of the Environmental Claim,
which notice shall specify in reasonable detail the basis therefor,
UNR shall be deemed to have agreed to indemnify the Indemnitee in
respect to the Environmental Claim. Notwithstanding any other
provision of this Section 13.3.2, Purchaser Indemnitee shall only be
required to give such prior notice as is reasonably practicable before
incurring any costs or expenses (1) pursuant to an order or directive
by a governmental agency or authority or (2) in order to prevent or
abate an imminent and substantial endangerment to human health or the
environment from any environmental condition, Release, or threatened
Release at any of the Purchased Real Property or Purchased Leasehold
Premises.
13.3.3 Upon the payment by UNR to any Purchaser Indemnitee
for any Loss arising out of an Environmental Claim, UNR shall be
subrogated to all rights and causes of action which such Purchaser
Indemnitee may have against any third party relating to such Loss.
13.3.4 For purposes of Section 13.1.1 (vi) and this Section
13.3, the term "Loss" shall be deemed to include any cost and expenses
related to any investigation, pre-remedial studies and investigations
or post-remedial monitoring
54
<PAGE>
and care, and any required financial assurance, as well as cost of clean-up,
remedial, corrective, restorative or response actions with respect to
any Environment Claim.
13.4 CLAIMS LIMITATIONS. Notwithstanding the foregoing provisions of
this Article 13.0,
13.4.1 Seller shall have no liability for indemnification
for any Losses under Section 13.1.1(i) hereof until and unless the
cumulative total of such Losses exceeds in the aggregate $250,000 (the
"Deductible"), at which time all amounts of Losses in excess of
$250,000 may be claimed and recovered as provided in this Agreement;
PROVIDED, HOWEVER, that the limitations of this Section l3.4.1 shall
not apply to any Losses resulting from or relating to (i) any
misrepresentation or breach of warranty contained in Section 4.3
hereof, or (ii) Seller's knowing or willful misrepresentations or
breaches of covenants or agreements made as a part of or contained in
this Agreement;
13.4.2 Seller shall have no liability for indemnification
for any Losses for Environmental Claims, unless the aggregate of all
Losses relating thereto for which Seller would, but for this clause,
be liable exceeds on a cumulative basis $400,000, and, to the extent
such Losses exceed on a cumulative basis $400,000 only to the extent
of 90% of the amount of such Losses in excess of $400,000;
13.4.3 If an Indemnitee recovers from any third party
(including insurers) all or any part of any amount previously paid to
it by an Indemnifying Party pursuant to Section 13.1, or 13.5 hereof,
such Indemnitee will promptly pay over to the Indemnifying Party the
amount so recovered (after deducting therefrom the full amount of the
expenses reasonably incurred by it in procuring such recovery), but
not in excess of any amount previously so paid by the Indemnifying
Party.
13.4.4 Notwithstanding anything contained in this Article
13, Seller shall not be liable to indemnify any Purchaser Indemnity
for any Loss, and such Loss shall not be applied towards the
thresholds in Sections 13.4.1 and 13.4.2 hereof, to the extent such
Losses are reserved against or otherwise reflected as a liability in
the Closing Statement.
13.4.5 Notwithstanding anything contained in this Article
13, Seller's liability for indemnification for any Losses hereunder
shall not exceed $80,000,000 in the aggregate.
13.5 TAX INDEMNIFICATION.
13.5.1 Seller will be responsible for, will pay or cause to
be paid, and will indemnify and hold harmless each Purchaser Indemnity
from and against, any and all Losses for or in respect of each of the
following:
55
<PAGE>
(i) any and all Taxes arising out of or relating to operations of the
Businesses or other business or operations of, transactions
involving, and distributions made by or to, UNR, Leavitt
Structural, Holco or any other member of an Affiliated Group, or
the assets of any of them, with respect to any taxable period (or
portions thereof) of the Business, Leavitt Structural or Holco (or
any predecessor) ending on or before the Closing Date (including,
without limitation, any liability for Taxes resulting from an
acceleration of an "intercompany transaction," within the meaning
of Treasury Regulation Section 1.1502-13(d) (or any analogous or
similar provision under state, local or foreign law or any
predecessor provision or regulation), that occurred on or before
the Closing Date and Taxes asserted against Purchaser or its
affiliates, including Holco, as a result of transferee liability);
(ii) any and all Taxes of any member (other than the Businesses,
Leavitt Structural or Holco) of an affiliated, consolidated,
combined, or unitary group of which the Businesses, Leavitt
Structural or Holco (or any predecessor) is or was a member on or
prior to the Closing Date by reason of the liability of the
Businesses, Leavitt Structural or Holco pursuant to Treasury
Regulation Section 1.1502-6(a) or any analogous or similar state,
local or foreign Law;
(iii) Taxes asserted against any person for which any Purchaser
Indemnity is liable under any agreement entered into by UNR,
Leavitt Structural or Holco prior to the Closing to indemnify such
person; and
(iv) any breach by Seller of any representation, warranty, covenant, or
agreement contained in Sections 4.8 or 13.5 hereof;
provided, however, that Seller shall not be liable for or obligated to
indemnify any Purchaser Indemnity for any Losses for or in respect of
Taxes to the extent such Taxes (A) result from an election or deemed
election by Purchaser under Section 338 of the Code with respect to
Holco (or any analogous provision under any state, local or foreign
tax law) or (B) arise as a result of the business, operations or
transactions of Purchaser or Holco after the Closing.
13.5.2 Purchaser agrees to pay, and to indemnify Seller in
respect of, and hold Seller harmless from and against, any and all
Losses for or in respect of Taxes incurred by, imposed upon, or
assessed against Seller or any affiliate of Seller (other than the
Businesses or Holco) described in the proviso at the end of Section
13.5.1 hereof.
13.5.3 The Purchaser will promptly notify Seller of the
commencement of any claim, audit, examination, or other proposed
change or adjustment by any taxing authority concerning any Taxes or
other Losses covered by Section 13.5.1 hereof ("Tax Claim"). Seller
shall control the defense and settlement of any Tax audit or
administrative or court proceeding relating to taxable periods of the
Business, Leavitt Structural or Holco ending on or prior to the
Closing Date,
56
<PAGE>
provided, however, that if the results of any such Tax audit or
administrative or court proceeding could reasonably be expected to be
material to Purchaser, the Businesses or Holco, then Purchaser may, at its
expense, participate in any such contest or proceeding upon written notice
to UNR given within 30 days after being notified of the commencement of
such proceeding and neither party shall compromise or settle such contest
or refund suit without the consent of the other; provided, that, nothing
contained herein shall prevent Seller from settling any such proceeding if
the only potential effect of such settlement on Purchaser is the
possibility that Holco would be liable for a resulting deficiency as a
former member of Seller's consolidated group, and if Seller pays or makes
adequate provision for the payment of any such deficiency. Seller shall
promptly notify the Purchaser if it decides not to participate in the
defense or settlement of any such Tax audit or administrative or court
proceeding and Purchaser thereupon shall be permitted to defend and settle
such Tax audit or proceeding. Seller will promptly notify the Purchaser of
the commencement of any claim, audit, examination, or other proposed change
or adjustment by any taxing authority which may affect the liability of the
Purchaser or either Company for Taxes (including any audit or proceeding
relating to Seller Consolidated Returns) and Seller shall keep the
Purchaser duly informed on a regular and periodic basis of the progress
thereof. For purposes of this Agreement, "Seller Consolidated Returns"
shall mean all consolidated, combined, affiliated or unitary Tax Returns
which include the Businesses, Leavitt Structural or Holco with respect to
the Businesses', Leavitt Structural's or Holco's taxable income or loss for
periods through the Closing Date.
13.5.4 Any claim for indemnity hereunder must be made prior
to 60 days after the expiration of the applicable Tax statute of
limitations with respect to the relevant taxable period (including all
periods of extension, whether automatic or permissive).
14.0 EXCLUSIVE DEALING AND TERMINATION FEE
14.1 EXCLUSIVE DEALING.
14.1.1 Commencing on the date of this Agreement and
terminating at 5:00 p.m. Dallas, Texas time on the date this Agreement
is terminated pursuant to Section 11.3 (the "Exclusivity Period"),
except as determined by Seller (on the advice of counsel) as may
otherwise be required to enable the directors of Seller to fulfill
their fiduciary duties under applicable law, Seller shall not, and
shall not authorize or permit any officer, director, agent or employee
of, or any investment banker, financial advisor, attorney, accountant
or other representatives retained by, the Seller or any affiliate of
Seller (each a "Seller Representative"), to, directly or indirectly,
(i) solicit, initiate, seek or encourage (including by way of
furnishing information or assistance) or take other material action to
facilitate any inquiries or the making of any proposal which
constitutes or may reasonably be expected to lead to, an Acquisition
Proposal (as defined below) from any person other than the
57
<PAGE>
Purchaser (a "Third Party"), or engage in any discussions or negotiations
relating thereto or in furtherance thereof or accept any Acquisition
Proposal, and Seller shall promptly (but in any event within one day
thereafter) notify the Purchaser orally (which notice shall promptly be
confirmed in writing) of any Acquisition Proposal or any inquiry with
respect thereto which Seller or any of its affiliates or any Seller
Representative may receive. For purposes of this Agreement, (x) no Seller
Representative shall be deemed to have engaged in "discussions" if such
Seller Representative only advises another person that Seller
Representative and Seller are precluded from taking any action that would
constitute a violation of this Section 14.1.1, and (y) no Seller
Representative shall be deemed to have "furnished information" to any other
person if such information is public information and is furnished in the
ordinary course of Seller's investor relations program.
14.1.2 Seller has terminated and has caused its Seller
Representatives to terminate, all solicitations, encouragement,
activities, discussions and negotiations with any parties conducted
heretofore by Seller or any Seller Representatives with respect to any
Acquisition Proposal.
14.1.3 As used in this Agreement, "Acquisition Proposal"
shall mean any proposal or offer, other than a proposal or offer (1)
by the Purchaser or any of its affiliates or (2) with respect to any
Excluded Assets, for (i) any merger, consolidation, share exchange,
business combination or other similar transaction in which the
Businesses would be acquired by any person, (ii) any sale, lease,
exchange, mortgage, pledge, transfer or other disposition of the
assets of the Businesses, in a single transaction or series of
transactions (whether related or unrelated) other than in the ordinary
course of business, (iii) any exchange offer for outstanding shares of
UNR's common stock or debt securities pursuant to which the Businesses
or any portion there (including the capital stock of Leavitt
Structural or Holco) would be acquired by any Third Party, or the
filing of a registration statement under the Securities Act of 1933,
as amended, in connection therewith, or (iv) any public announcement
of a proposal, plan or intention to do any of the foregoing or any
agreement to engage in any of the foregoing.
14.2 TERMINATION PAYMENT. If this Agreement shall terminate because of
a material breach by the Seller of any representation, warranty, covenant or
agreement of Seller herein, or because of the occurrence of an event, or the
failure of a condition to Purchaser's obligations hereunder or Seller's
obligations hereunder to have been satisfied, which event or failure is a result
of a breach by Seller of its covenants and agreements hereunder, then, in the
event that during or within nine months after the end of the Exclusivity Period,
Seller enters into an agreement providing for a transaction of a type included
within the definition of "Acquisition Proposal," and which transaction will
provide consideration to the Seller or its stockholders substantially equivalent
to or in excess of that contemplated by this Agreement, with any person (other
than the Purchaser or an affiliate of the Purchaser) with whom Seller or any
Seller Representative engaged in discussions or negotiations, or to whom Seller
or any Seller Representative furnished information concerning Seller or assets
of the Businesses, or from whom
58
<PAGE>
Seller or any Seller Representative has solicited, initiated, sought, or
encouraged an Acquisition Proposal, during the Exclusivity Period, whether or
not such discussions or negotiations or the provision of such information was in
violation of this Agreement, Seller shall be obligated to pay Purchaser an
amount in cash equal to $3,000,000 (the "Termination Amount"). Purchaser shall
be entitled to receive the Termination Amount immediately upon the execution by
Seller of any such agreement.
15.0 POST-CLOSING TAX MATTERS
15.1 SELLER TAX RETURNS. Seller will prepare and file, or cause to be
prepared and filed, all appropriate and necessary Tax Returns which include, on
a consolidated or any other reporting basis, the results of operations of the
Businesses, Leavitt Structural and Holco for all taxable periods ending on or
before the Closing Date, including the period beginning January 1, 1996, through
the Closing Date (the "Interim Tax Returns") (collectively, the "Seller Tax
Returns"). Seller will timely pay or discharge, or cause to be paid or
discharged, any and all Taxes for which the Businesses, Leavitt Structural and
Holco may be held liable as a result of Seller Tax Returns, unless such Taxes
are being contested in good faith; PROVIDED, HOWEVER, nothing in this Section
15.1 shall be construed to limit Seller's or Purchaser's indemnification rights
set forth in Article 13.0 hereof. Seller and its affiliates will not amend any
Seller Consolidated Return with respect to either of the Companies in a manner
which may adversely affect tax liability of either Company in a taxable period
ending after the Closing Date without consulting with Purchaser and obtaining
the written consent of Purchaser to such amended Tax Return.
15.2 PURCHASER TAX RETURNS. Purchaser will timely prepare and file, or
cause to be timely prepared and filed, all appropriate and necessary returns,
reports and estimates for all Taxes of Holco which relate to taxable periods
ending after the Closing Date, including the period from and after the Closing
Date through December 31, 1996 (collectively, the "Purchaser Tax Returns"). To
the extent any Purchaser Tax Return relates to the operations of Holco during
any period prior to the Closing Date, Purchaser will consult with Seller in the
preparation of such tax return and shall not file such tax return until
obtaining the written consent of Seller (which consent shall not be unreasonably
withheld). Purchaser will pay or cause to be paid to the taxing authority any
and all Taxes due as a result of Purchaser Tax Returns required to be filed
pursuant to the preceding sentence, unless such Taxes are being contested in
good faith; PROVIDED, HOWEVER, that, except to the extent such Taxes are
reserved against or reflected as a liability in the Closing Statement, Seller
shall pay to and reimburse Purchaser for any Taxes paid by Purchaser or Holco
under or pursuant to the Purchaser Tax Returns to the extent relating to the
operations of the Businesses prior to the Closing Date within five days after
Purchaser delivers to UNR a copy of the Purchaser Tax Return pursuant to which
such Tax is payable, and nothing in this Section l5.2 shall be construed to
limit any Purchaser Indemnitee's indemnification rights set forth in Article
l3.0 hereof.
15.3 COOPERATION. Purchaser and Seller agree to furnish or cause to be
furnished to each other, upon request, as promptly as practicable, such
information (including, without limitation, access to books and records) and
reasonable assistance relating to the Businesses, Leavitt Structural and Holco
as is reasonable necessary for the preparation and filing of any Tax Return
contemplated in this Article 15.0, for the preparation for any audit, and for
the prosecution of any
59
<PAGE>
proceeding in respect of any proposed adjustment. Purchaser and Seller shall
cooperate with each other in the conduct of any audit or other proceedings
involving the Businesses, Leavitt Structural and Holco or any entity with which
they are consolidated or combined for any Tax purposes and each shall execute
and deliver such documents as are necessary to carry out the intent of this
Article 15.0.
15.4 SECTION 338 ELECTION. If Purchaser makes, or is deemed to make,
an election under Section 338 of the Code with respect to Holco, Purchaser shall
be solely responsible for any Taxes resulting from such election. The election
provided for in Section 338(h)(10) of the Code shall not be made.
60
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
CHASE BRASS INDUSTRIES, INC.
By /s/ MARTIN V. ALONZO
-------------------------
Martin V. Alonzo
President and Chief Executive Officer
UNR INDUSTRIES, INC.
By /s/ T. A. GILDEHAUS
-------------------------
Thomas A. Gildehaus
President and Chief Executive Officer
LEAVITT STRUCTURAL TUBING CO.
By /s/ T. A. GILDEHAUS
-------------------------
Thomas A. Gildehaus
President and Chief Executive Officer
61
<PAGE>
AMENDMENT NO. 1
TO SALE AND PURCHASE AGREEMENT
This AMENDMENT NO. 1 TO SALE AND PURCHASE AGREEMENT (the "Amendment") is
made as of the 1st day of July, 1996, by and among CHASE BRASS INDUSTRIES, INC.,
a Delaware corporation ("CBI"), LEAVITT TUBE COMPANY, INC. ("Purchaser"), a
Delaware corporation and wholly-owned subsidiary of CBI, UNR INDUSTRIES, INC., a
Delaware corporation ("UNR"), and LEAVITT STRUCTURAL TUBING CO., a Delaware
corporation and an wholly-owned subsidiary of UNR ("LST" and collectively with
UNR "Seller"), to amend that certain Sale and Purchase Agreement, dated as of
May 15, 1996 ("Purchase Agreement"), by and among CBI, UNR and LST, as assigned
by CBI to, and assumed by, Purchaser pursuant to that certain Assignment and
Assumption Agreement dated June 26, 1996 ("Assignment").
1. DEFINITIONS. Unless the context indicates otherwise, capitalized
terms used but not defined in this Amendment and defined in the Purchase
Agreement shall have the meanings ascribed to them in the Purchase Agreement.
2. SECTION 3.1.
Section 3.1 of the Purchase Agreement hereby is amended to read in its
entirety as follows:
3.1 TIME AND PLACE OF CLOSING. The closing of the sale of
the Purchased Assets and the Shares shall take place at Bell, Boyd &
Lloyd, Three First National Plaza, Room 3300, Chicago, Illinois at
10:00 o'clock A.M. local time, on August 30, 1996; provided, however,
that if any conditions to the obligations of the parties under this
Agreement has not been satisfied or waived by said date, then the
closing shall take place on a subsequent date, which shall be
determined by the mutual agreement of Purchaser and Seller (unless
this Agreement is earlier terminated pursuant to Section 11.4 hereof).
Throughout this Agreement, such event is referred to as the "Closing"
and such date and time referred to as the "Closing Date."
3. SECTION 3.3.
Section 3.3 of the Purchase Agreement hereby is amended to read in its
entirety as follows:
3.3 EFFECTIVE TIME. The transfer of the Purchased Assets
and the Shares shall be deemed to occur at 12:01 o'clock A.M. Chicago,
Illinois time on the Closing Date, unless the Closing Date is the last
Business Day of the month, in which case the transfer of the Purchased
Assets and the Shares shall be deemed to occur at 11:59 o'clock P.M.
Chicago, Illinois time on the Closing Date (the
1
<PAGE>
"Effective Time"). All of the transactions in this Article 3.0 shall be
deemed to occur simultaneously, and none shall be deemed completed until
all are completed.
4. SECTION 3.4.4; SCHEDULE 3.4.4.
a. Section 3.4.4 of the Purchase Agreement hereby is amended by
deleting all references to "$62,779,434" in each place where such number is
written in Section 3.4.4 and replacing all such references with "$62,819,245."
b. SCHEDULE 3.4.4 of the Purchase Agreement hereby is deleted
in its entirety and replaced with Schedule 3.4.4 attached hereto.
5. SCHEDULE 4.21. Schedule 4.21 of the Purchase Agreement hereby is
deleted in its entirety and replaced with Schedule 4.21 attached hereto.
6. SECTION 11.3.1.4. Section 11.3.1.4 of the Purchase Agreement
hereby is amended by deleting the reference to "August 31, 1996" contained
therein and replacing such date with "September 30, 1996."
7. STOCKHOLDER APPROVAL. UNR shall take commercially reasonable
efforts to obtain approval of the majority stockholder of UNR of the
transactions contemplated by the Purchase Agreement as soon as reasonably
practicable after the date hereof.
8. INCORPORATION BY REFERENCE. Sections 11.2, 11.4, 11.6, 11.7,
11.9, 11.10 and 11.11 of the Purchase Agreement are incorporated herein by
reference.
As hereby amended, the Purchase Agreement shall remain in full force and
effect.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date above first written.
CHASE BRASS INDUSTRIES, INC.
By: /s/ MARTIN V. ALONZO
-------------------------
Martin V. Alonzo
President and Chief Executive Officer
LEAVITT TUBE COMPANY, INC.
By: /s/ PETER H. SANTORO
-------------------------
Peter H. Santoro
Vice President
UNR INDUSTRIES, INC.
By: /s/ T. A. GILDEHAUS
-------------------------
Thomas A. Gildehaus
President and Chief Executive Officer
LEAVITT STRUCTURAL TUBING CO.
By: /s/ T. A. GILDEHAUS
-------------------------
Thomas A. Gildehaus
President and Chief Executive Officer
3
<PAGE>
<PAGE>
EXHIBIT 2
SALE AND PURCHASE AGREEMENT
DATED JUNE 18, 1996
between
RICHARDS CAPITAL FUND, L.P.
and
UNR INDUSTRIES, INC.
1
<PAGE>
TABLE OF CONTENTS
Page
----
1.0 Purchase and Sale of Assets.............................................1
1.1 Purchased Assets.................................................1
1.2 Excluded Assets..................................................2
2.0 Purchase Price..........................................................3
2.1 Amount of the Purchase Price.....................................3
2.2 Allocation of the Purchase Price among the Purchased Assets......3
2.3 Assumed Liabilities..............................................4
2.4 Excluded Liabilities.............................................4
2.5 Adjustment of Purchase Price.....................................5
3.0 Closing.................................................................8
3.1 Time and Place of the Closing....................................8
3.2 Procedure at the Closing.........................................8
4.0 Representations and Warranties of the Seller............................9
4.1 Organization, Power and Authority of the Seller.................10
4.2 Subsidiaries....................................................10
4.3 Financial Summaries.............................................10
4.4 Liabilities of the Businesses...................................10
4.5 Tax Matters.....................................................11
4.6 Real Estate of the Businesses...................................11
4.7 Good Title to the Purchased Assets..............................12
4.8 Inventories.....................................................12
4.9 Accounts Receivable.............................................12
i
<PAGE>
Page
----
4.10 Licenses and Permits............................................12
4.11 Proprietary Rights..............................................12
4.12 Purchased Contracts.............................................13
4.13 Adequacy of the Purchased Assets................................13
4.14 Insurance.......................................................13
4.15 Litigation......................................................14
4.16 No Material Adverse Change......................................14
4.17 Absence of Certain Acts or Events...............................14
4.18 Compliance with Laws............................................15
4.19 Environmental Matters...........................................15
4.20 Employee Matters; Labor Relations...............................16
4.21 Employee Benefits...............................................17
4.22 Officers and Employees..........................................18
4.23 Product Recalls.................................................18
4.24 Absence of Defaults.............................................18
4.25 Due Authorization; Binding Obligation...........................18
4.26 Transactions with Affiliates....................................19
4.27 True and Complete Copies........................................19
4.28 Limitations on Seller's Representations and Warranties..........19
5.0 Representations and Warranties of the Purchaser........................20
5.1 Organization, Power and Authority of the Purchaser..............20
5.2 Due Authorization; Binding Obligation...........................20
5.3 Investigation by Purchaser......................................20
5.4 Hart-Scott-Rodino...............................................20
5.5 Confidentiality.................................................20
ii
<PAGE>
Page
----
6.0 Additional Covenants of the Parties....................................21
6.1 All Reasonable Efforts..........................................21
6.2 Conduct of Business Pending the Closing.........................21
6.3 Access to the Properties and Records of the Businesses..........22
6.4 No Disclosure...................................................22
6.5 Bulk Sales Law..................................................23
6.6 Expenses........................................................23
6.7 Employee Matters................................................23
6.8 Obligation to Notify............................................27
6.9 Supplements to Schedules........................................28
6.10 No Solicitation of Transactions.................................28
6.11 Insurance.......................................................28
6.12 Transition Matters..............................................29
6.13 Use of Trade Names..............................................29
6.14 Logo............................................................29
6.15 Notice of Unavailability of Financing...........................29
6.16 Noncompetition..................................................29
6.17 Option..........................................................31
7.0 Conditions to the Obligation of the Purchaser..........................31
7.1 Accuracy of the Seller's Representations and Warranties and
Compliance by the Seller with Its Obligations.................31
7.2 Certified Resolutions...........................................32
7.3 Opinion of Counsel..............................................32
7.4 Receipt of Necessary Consents...................................32
7.5 Title Insurance.................................................32
iii
<PAGE>
Page
----
7.6 No Adverse Order................................................32
7.7 No Material Adverse Change......................................32
iv
<PAGE>
Page
----
7.8 Availability of Financing.......................................32
7.9 Physical Capacity of Russell Begley.............................32
8.0 Conditions to Obligations of the Seller................................33
8.1 Accuracy of Representations and Warranties and Compliance with
Obligations...................................................33
8.2 Opinion of Counsel..............................................33
8.3 Certified Resolutions...........................................33
8.4 No Adverse Order................................................33
9.0 Certain Actions After the Closing......................................33
9.1 Purchaser to Act as Agent for Seller............................33
9.2 Purchaser Appointed Attorney for Seller.........................34
10.0 Product Warranty and Liability Claims...........................34
10.1 Product Warranty and Liability Claims; Cooperation in
Litigation....................................................34
11.0 Indemnification.................................................34
11.1 Indemnification Obligations of the Seller.......................34
11.2 Indemnification Obligations of the Purchaser....................35
11.3 Remedies Cumulative.............................................36
11.4 Seller Basket...................................................36
11.5 Purchaser Basket................................................36
11.6 Seller Limit....................................................36
11.7 Notice of Claim.................................................37
11.8 Defense.........................................................37
12.0 Miscellaneous...................................................37
12.1 Brokers' Commission.............................................37
12.2 Amendment and Modification......................................38
12.3 Termination.....................................................38
v
<PAGE>
Page
----
12.4 Binding Effect; Assignment......................................38
12.5 Entire Agreement................................................39
12.6 Headings........................................................39
12.7 Execution in Counterpart........................................39
12.8 Notices.........................................................39
12.9 Governing Law...................................................40
12.10 Limitation on Rights of Other Persons...........................40
12.11 Severability....................................................40
12.12 Termination of Representations, Warranties and Agreements.......40
12.13 Arbitration.....................................................41
12.14 Purchaser's Option Upon Material Casualty Loss..................42
12.15 Certain Definitions.............................................42
vi
<PAGE>
SCHEDULES
Schedule 1.1.3 Purchased Fixed Assets
Schedule 1.1.6 Purchased Contracts
Schedule 1.1.8 Purchased Proprietary Rights
Schedule 1.2.3 Excluded Proprietary Rights
Schedule 2.5.2.1 Valuation of Inventories
Schedule 4.3 Financial Summaries
Schedule 4.6 Real Estate of the Seller
Schedule 4.7 Certain Liens
Schedule 4.8 Inventories
Schedule 4.10 Licenses and Permits
Schedule 4.15 Litigation and Claims
Schedule 4.17 Absence of Certain Acts or Events
Schedule 4.18 Compliance with Laws
Schedule 4.19 Environmental Matters
Schedule 4.20 Employee Matters; Labor Relations
Schedule 4.21 Employee Benefits
Schedule 4.22 Officers and Employees
Schedule 4.26 Transactions with Affiliates
Schedule 4.28 Individuals with Knowledge
Schedule 6.7.4 Severance Benefits
Schedule 7.4 Necessary Consents
vii
<PAGE>
SALE AND PURCHASE AGREEMENT
This Sale and Purchase Agreement (the "Agreement") is made and entered into
this 18th day of June, 1996 between UNR Industries, Inc., a Delaware corporation
("UNR" or "Seller") and Richards Capital Fund, L.P., a Georgia limited
partnership (the "Purchaser").
RECITALS
UNR desires to sell, convey, transfer and assign to the Purchaser, and the
Purchaser desires to purchase from UNR, the assets, properties and business of
the Commercial Products Division of UNR (the "Division") for a purchase price
consisting of cash and the assumption by the Purchaser of certain liabilities of
the Seller, all as herein provided and on the terms and conditions hereinafter
set forth. The assets, properties and businesses of the Division, which
operates Seller's shopping and luggage cart and supermarket display handling and
stocking equipment businesses, are herein sometimes referred to collectively as
the "Businesses."
COVENANTS
In consideration of the mutual representations, warranties and covenants
and subject to the conditions herein contained, the parties hereto agree as
follows:
1.0 PURCHASE AND SALE OF ASSETS
1.1 PURCHASED ASSETS. The Seller agrees to and will sell, convey,
transfer, assign and deliver to the Purchaser at the Closing (as hereinafter
defined), free and clear of all liens, mortgages, pledges, encumbrances and
charges of every kind (except those which the Purchaser has expressly agreed in
Section 2.3 hereof to assume), on the terms and subject to the conditions set
forth in this Agreement, all of the properties, business and assets used in or
relating to the Businesses of every kind and description, real, personal and
mixed, tangible and intangible, wherever located (except those assets of the
Businesses which are specifically excluded from this sale by Section 1.2 hereof
as they shall exist at the Closing Date (as hereinafter defined)) (collectively,
the "Purchased Assets"). Without limiting the generality of the foregoing, the
Purchased Assets shall include the following:
1.1.1 all right, title and interest of the Seller in and to the
real property described in Schedule 4.6 hereto, including the real
property, buildings, facilities and other improvements thereon, and all
easements, rights of way and other appurtenances thereto (the "Purchased
Real Estate");
1.1.2 all of the interests of and the rights and benefits accruing
to the Seller as lessee of the real properties (the "Purchased Leasehold
Premises") identified on Schedule 4.6 hereto (the "Purchased Leasehold
Rights");
1.1.3 all machinery, vehicles, equipment, tools, spare parts,
construction in progress, computer equipment and computer programs,
furniture and fixtures and
<PAGE>
other fixed assets owned by the Seller and located on the Purchased Real
Estate, the Purchased Leasehold Premises or elsewhere, that are used in the
Businesses including, without limitation, those identified in Schedule
1.1.3 (the "Purchased Fixed Assets");
1.1.4 all inventories of the Seller relating to the Businesses;
1.1.5 all receivables of the Seller (other than intercompany
receivables) relating to the Businesses;
1.1.6 all of the rights and benefits accruing to the Seller under
or pursuant to contracts, agreements, arrangements, commitments, open
purchase orders for capital equipment and blanket purchase orders relating
to the Businesses, including, without limitation, those identified in
Schedule 1.1.6 (the "Purchased Contracts");
1.1.7 all operating data and records of the Seller related to the
Businesses, including customer lists, financial, accounting and credit
records, correspondence, budgets and other similar documents and records
(the "Purchased Records");
1.1.8 except as provided in Section 1.2.3, all of the proprietary
rights of Seller relating to the Businesses, including without limitation,
all patents, patent applications, patent licenses, trademarks, trade names
and registrations and applications therefor, trade secrets, technology,
know-how, formulae, designs and drawings, computer software, slogans,
copyrights, processes and other similar intangible property and rights
relating to the Businesses, as set forth on Schedule 1.1.8 (the "Purchased
Proprietary Rights");
1.1.9 all prepaid and deferred items of the Seller existing on the
Closing Date with respect to the Businesses, including prepaid rentals,
taxes and unbilled charges and deposits relating to the operations of the
Businesses; and
1.1.10 all of Seller's right, title and interest in and to the
goodwill of the Seller relating to the Businesses.
1.2 EXCLUDED ASSETS. Notwithstanding Section 1.1, the Seller is not
selling or assigning to Purchaser, and the Purchased Assets shall not include,
any of the following:
1.2.1 the Cash Consideration and Seller's other rights under this
Agreement;
1.2.2 cash and cash equivalents of the Seller relating to the
Businesses;
1.2.3 trademarks, trade names, service marks and symbols denoting
or connoting UNR, as set forth on Schedule 1.2.3 hereto (the "Excluded
Proprietary Rights");
2
<PAGE>
1.2.4 any document containing information about the Businesses
which is not material to or necessary for the conduct of the Businesses and
which is combined or consolidated with other information of Seller or
prepared by Seller for the purpose of informing its management about the
sale of the Businesses or the Purchased Assets;
1.2.5 all privileged communications, oral or written, between
Seller's officers, directors or employees and Seller's attorneys (both
inside and outside counsel), on any subject whatsoever regarding any of the
Businesses. If any documents are inadvertently transferred to Purchaser
which contain such privileged communications or attorney work product,
Purchaser shall immediately return such documents to the Seller upon
discovery and such inadvertent disclosure shall not be deemed to be a
waiver of the attorney-client privilege or work product doctrine;
1.2.6 the property owned by the Seller and located at 1132 Kansas
Street, Memphis, Tennessee 38106;
1.2.7 assets located at Seller's corporate headquarters and used in
the performance of services for the Businesses which are used primarily for
other operations of the Seller and which are not material to the operations
of the Businesses; and
1.2.8 all capital stock and other ownership interests held by the
Seller in any entity and all of the assets, properties and rights owned by
each such entity, together with all liabilities and obligations of any
nature whatsoever of each such entity (such entities are referred to
collectively herein as the "Excluded Subsidiaries").
2.0 PURCHASE PRICE
2.1 AMOUNT OF THE PURCHASE PRICE. As consideration for the Purchased
Assets (the "Purchase Price"), the Purchaser agrees, subject to the terms,
conditions and limitations set forth in this Agreement:
2.1.1 to pay to or for the account of the Seller, in the manner
specified in Section 3.2.4 hereof, Forty-One Million Dollars ($41,000,000)
(the "Cash Consideration"); and
2.1.2 to assume and be responsible for, to the extent provided in
Section 2.3 hereof, the liabilities and obligations of the Seller as they
exist at the Closing Date.
2.2 ALLOCATION OF THE PURCHASE PRICE AMONG THE PURCHASED ASSETS. The
Purchase Price shall be allocated among each item or class of the Purchased
Assets as agreed by the parties hereto. The Seller and the Purchaser agree that
they will prepare and file their respective federal
3
<PAGE>
and any state or local income tax returns based on such allocation of the
Purchase Price. The Seller and the Purchaser agree that they will prepare
and file any notices or other filings required pursuant to Section 1060 of
the Internal Revenue Code of 1986, as amended (the "Code") or any other
Sections of the Code or applicable state tax laws and regulations and that
any such notices or filings will be prepared based on such allocation of the
Purchase Price.
2.3 ASSUMED LIABILITIES. The Purchaser agrees to and will at the
Closing assume and agree to pay, discharge and perform when lawfully due those
liabilities, contracts, commitments and other obligations of the Seller relating
to the Businesses and the Purchased Assets (i) under executory leases and
contracts to which Seller is a party to the extent such obligations are not
performed prior to the Closing Date, are disclosed in such executory leases and
contracts, and accrue (and relate to the Businesses) subsequent to the Closing
Date, (ii) set forth in the Interim Statement of Assets and Liabilities
described in Section 4.3.3 hereof, (iii) as provided in Section 6.7 hereof and
(iv) arising in the ordinary course of business of the Businesses, in each case
as the same shall exist at the Closing (the "Assumed Liabilities").
2.4 EXCLUDED LIABILITIES. Anything to the contrary in Section 2.3
notwithstanding, the Assumed Liabilities shall exclude the following
liabilities, contracts, commitments and other obligations of the Seller (the
"Excluded Liabilities"):
2.4.1 Seller's obligations and any liabilities arising under this
Agreement;
2.4.2 any obligation of the Seller for or relating to federal,
state, local or foreign income tax liability (including interest and
penalties) of the Seller, including, but not limited to, any obligation
arising from the operation of the Businesses up to the Closing Date or
arising out of the sale by the Seller of the Purchased Assets pursuant
hereto;
2.4.3 any obligation imposed by law on the Seller for any transfer,
sales or other taxes, fees or levies imposed by any state or other
governmental entity on or arising out of the sale of the Purchased Assets
pursuant hereto;
2.4.4 any obligation of the Seller for expenses incurred in
connection with the sale of the Purchased Assets pursuant hereto, including
without limitation the fees and expenses of its investment bankers, counsel
and independent auditors and one-half of the cost of title insurance on the
Purchased Real Estate;
2.4.5 any liability or obligation of the Seller that did not arise
out of the conduct of the Businesses;
2.4.6 any liability or obligation of the Seller relating to or
arising from the breach of, default under or failure to comply with, at any
time on or prior to the Closing Date, any contract (written or oral),
agreement or other instrument relating to the Businesses or any account
payable or similar obligation relating to the Businesses that is past due
or that the Seller has failed to timely pay or perform
4
<PAGE>
in accordance with its terms, except to the extent Seller's failure to
timely pay or perform results from a good faith dispute by the Seller of
its liability or obligation;
2.4.7 any liability or obligation arising under or relating to
litigation, claims or administrative actions (i) pending as of the Closing
Date or (ii) except as provided in Section 10.1 hereof, arising from or
relating to the conduct of the Businesses prior to the Closing Date;
2.4.8 any liability or obligation of the Seller relating to the
Duralast Facility located in Tulsa, Oklahoma and previously owned by the
Seller;
2.4.9 any liability or obligation arising under or relating to any
of the Excluded Assets;
2.4.10 any liability, contract, commitment or other obligation of
Seller, the existence of which constitutes or will constitute a breach of
any representation or warranty of Seller contained in or made pursuant to
Article 4.0 of this Agreement;
2.4.11 except as otherwise expressly provided in Section 6.7
hereof, any liability or obligation relating to or arising under any plan,
program, policy, practice or arrangement established or sponsored by the
Seller or its affiliates (as defined in Section 12.15 below) providing
benefits or compensation to employees or former employees of the Businesses
or their dependents, including, without limitation, any employee benefit
plan described in Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended, and the regulations, if any, thereunder ("ERISA")
and any workers' compensation benefits; and
2.4.12 any liability or obligation constituting an Excluded Current
Liability (as defined on Exhibit A-1; the "Excluded Current Liabilities").
2.5 ADJUSTMENT OF PURCHASE PRICE.
2.5.1 The parties hereto acknowledge that the Purchase Price being paid by
the Purchaser hereunder has been calculated based on certain assumptions with
respect to the working capital reflected on the Interim Statement (as defined in
Section 4.3.3). Accordingly, the parties hereto agree that the Purchase Price
shall be subject to the following adjustments:
2.5.1.1 If the Audited Working Capital Amount is less than the sum
of (i) Twenty Million Dollars ($20,000,000), plus (ii) the amount of
Excluded Current Liabilities (as defined on Exhibit A-1 as of the Closing
Date and as reflected on the final Working Capital Statement (as defined
below)) (the "Target Working Capital Amount"), the Seller shall pay to the
Purchaser an amount (the "Seller Adjustment Payment") equal to (1) the
amount (the "Shortfall") by which the Audited Working Capital Amount is
less
5
<PAGE>
than the Target Working Capital plus (2) simple interest on the Shortfall
at the "Prime Rate" (as reported in the "Money Rates" table of THE WALL
STREET JOURNAL on the Closing Date) for the period commencing as of (and
including) the Closing Date and ending as of (but excluding) the date the
Shortfall is paid to the Purchaser. If the Audited Working Capital Amount
is greater than the Target Working Capital Amount, the Purchaser shall pay
to the Seller an amount (the "Purchaser Adjustment Payment"; the Seller
Adjustment Payment and the Purchaser Adjustment Payment sometimes are
referred to collectively herein as an "Adjustment Payment") equal to (1)
the amount (the "Surplus") by which the Audited Working Capital Amount is
greater than the Target Working Capital Amount plus (2) simple interest on
the Surplus at the Prime Rate for the period commencing as of (and
including) the Closing Date and ending as of (but excluding) the date the
Surplus is paid to the Seller. As used herein, the term "Audited Working
Capital Amount" shall mean an amount equal to (x) the Purchased Assets
which are current assets less (y) the total current liabilities of the
Businesses plus (z) the Excluded Current Liabilities, in each case as these
amounts are reflected on the final Working Capital Statement.
2.5.1.2 Exhibit A-2 hereto sets forth a sample calculation of the
Adjustment Payment based on March 31, 1996 financial information provided
by the Seller. The parties acknowledge and agree that this sample
calculation has been attached hereto solely for the purposes of
demonstration of the calculation process.
2.5.1.3 Any Adjustment Payment required to be paid pursuant to
Section 2.5.1.1 hereof shall be paid by wire transfer of immediately
available federal funds to an account designated by the party to whom such
payment is owed within five days after the final and conclusive
determination of the Working Capital Statement pursuant to Section 2.5.2 or
2.5.3.
2.5.2 As promptly as practicable after the Closing Date, but in any case
not later than 90 days thereafter, the Purchaser shall cause to be prepared and
delivered to the Seller a statement of the Purchased Assets which are current
assets, the Assumed Liabilities which are current liabilities, and the Excluded
Current Liabilities, all as of the Closing Date (the "Working Capital
Statement")
6
<PAGE>
in accordance with the following guidelines (the date on which such Working
Capital Statement is delivered by the Purchaser to the Seller is referred to
herein as the "Delivery Date"):
2.5.2.1 The Working Capital Statement shall be in the form attached
as Exhibit A-1 hereto and shall set forth the net book values of the
Purchased Assets which are current assets, the Assumed Liabilities which
are current liabilities, and the Excluded Current Liabilities, all as of
the Closing Date, which net book values shall be (i) derived from and in
accordance with the books and records of the Businesses and (ii) determined
in accordance with generally accepted accounting principles applied on a
basis consistent with the principles used in the preparation of the Interim
Statement, except that inventory will be valued in accordance with the
methodology set forth on Schedule 2.5.2.1 hereto;
2.5.2.2 The Working Capital Statement shall have been audited by
Price Waterhouse LLP ("Price Waterhouse") and shall be accompanied by its
report thereon; and
2.5.2.3 The Seller and any firm of nationally recognized
independent public accountants other than Price Waterhouse selected by
Seller (the "Seller's Accountants") shall have the right to observe all
steps (including any physical inventory) taken by the Purchaser and Price
Waterhouse in connection with the preparation of the Working Capital
Statement and to review all work papers and procedures relating thereto and
shall have complete access to all books and records of the Businesses
during normal business hours relevant to the preparation of the Working
Capital Statement.
Upon receipt by the Seller of the Working Capital Statement, the Seller and
the Seller's Accountants shall have 30 days after the Delivery Date to review
the Working Capital Statement delivered by the Purchaser pursuant to this
Section 2.5.2 (the "Review Period"). If the Seller disputes the Working Capital
Statement so delivered by the Purchaser, the Seller shall, on or prior to the
last day of the Review Period, prepare and submit to the Purchaser a notice of
dispute (a "Notice of Dispute") which shall set forth the Seller's proposed
Working Capital Statement and shall specifically enumerate the items and
calculations objected to in the Working Capital Statement delivered by the
Purchaser (the "Disputed Items"). If the Seller fails to deliver a Notice of
Dispute on or prior to the last day of the Review Period, the Working Capital
Statement delivered by the Purchaser to the Seller pursuant to this Section 2.5
shall be the final Working Capital Statement for purposes of this Agreement.
Upon receipt of a Notice of Dispute,
7
<PAGE>
the Seller and the Purchaser will, for a period of 20 days following
delivery of such Notice of Dispute, seek in good faith to resolve all
Disputed Items and agree on a Working Capital Statement.
2.5.3 After receipt of a Notice of Dispute, if the Seller and the
Purchaser are unable to agree on a Working Capital Statement within the
20-day period referred to in the last sentence of 2.5.2, each of the Seller
and Seller's Accountants, on the one hand, and the Purchaser and Price
Waterhouse, on the other hand, shall, within 30 days after the date on
which the Notice of Dispute was delivered by the Seller to the Purchaser,
prepare and submit to the other and to Deloitte & Touche LLP (the
"Arbitrator") their respective proposed Working Capital Statement together
with a statement of their respective positions with respect to any
unresolved Disputed Items. The Arbitrator shall, after the submission of
such information by the Purchaser and the Seller, review such Disputed
Items only and submit its written decision to the Seller and the Purchaser
within 30 days after receipt of such information by the Purchaser and the
Seller, and the Working Capital Statement as adjusted by the Arbitrator
shall be the final Working Capital Statement for purposes of this
Agreement. In connection with such review, the Arbitrator shall have
complete access to all books and records of the Businesses relevant to
preparation of the Working Capital Statement. Any determination by the
Arbitrator with respect to any disputes regarding the Working Capital
Statement shall be final and binding on the Seller and the Purchaser. The
costs of the Arbitrator shall be borne 50% by the Seller and 50% by the
Purchaser.
3.0 CLOSING
3.1 TIME AND PLACE OF THE CLOSING. The parties shall each use all
reasonable efforts (as defined in Section 12.15 below) to cause the closing of
the sale of the Purchased Assets to occur at Bell, Boyd & Lloyd, Three First
National Plaza, Room 3300, Chicago, Illinois at 10:00 A.M., local time, on July
19, 1996; provided, however, that if any of the conditions to the obligations of
the parties under this Agreement has not been satisfied (or waived) by said date
or either party is otherwise not able to close on such date after exerting all
reasonable efforts to do so, then the closing shall take place on a subsequent
date, which shall be determined by the mutual agreement of the Purchaser and the
Seller (unless this Agreement is earlier terminated pursuant to Section 12.3
hereof). Throughout this Agreement, such event is referred to as the "Closing"
and such date and time are referred to as the "Closing Date."
3.2 PROCEDURE AT THE CLOSING. At the Closing, the parties agree to take
the following steps in the order listed below (provided, however, that upon
their completion all such steps shall be deemed to have occurred
simultaneously):
3.2.1 The Seller shall deliver to the Purchaser evidence, in such
form as in each case is reasonably satisfactory to the Purchaser, that each
of the conditions to the obligation of the Purchaser to purchase the
Purchased Assets from the Seller which is set forth in this Agreement has
been satisfied.
8
<PAGE>
3.2.2 The Purchaser shall deliver to the Seller evidence, in such
form as in each case is reasonably satisfactory to the Seller, that each of
the conditions to the obligation of the Seller to sell the Purchased Assets
to the Purchaser which is set forth in this Agreement has been satisfied.
3.2.3 The Seller shall deliver to the Purchaser such limited
warranty deeds, bills of sale, endorsements, assignments, affidavits and
other instruments, in such form as in each case is reasonably satisfactory
to the Purchaser, as shall be sufficient to vest in the Purchaser good and
marketable title to the Purchased Assets, free and clear of all liens,
mortgages, pledges, encumbrances, and charges of every kind (except those
permitted under this Agreement or which the Purchaser has expressly agreed
in Section 2.3 hereof to assume (the "Permitted Exceptions")) or as are
otherwise reasonably requested by the Purchaser and sufficient for the
Purchaser to obtain an owner's title insurance policy (ALTA Form 1992)
insuring Purchaser's fee simple title to the Purchased Real Estate, subject
only to the Permitted Exceptions, and specifically without exception to the
"standard" exceptions and the creditors' rights exceptions contained in
said title insurance policy.
3.2.4 The Seller shall deliver to the Purchaser Form UCC-3s and any
other documents necessary to terminate all liens on the Purchased Assets
(other than those liens identified on Schedule 4.7 hereto as not to be
terminated at Closing), which UCC-3s and other documents shall be in a form
reasonably satisfactory to the Purchaser.
3.2.5 The Purchaser shall pay to the Seller the Cash Consideration
by delivering to the Seller by wire transfer of immediately available
federal funds the sum of Forty-One Million Dollars ($41,000,000).
3.2.6 The Purchaser shall, on behalf of and for the account of the
Seller, make the payments necessary to fully pay and discharge all
indebtedness of the Seller outstanding under the Promissory Note, dated
December 15, 1986, issued by UNARCO Industries, Inc. (to which the Seller
succeeded) in favor of Wagoner Industrial Development Authority, an agency
of the State of Oklahoma, and the Seller shall obtain and deliver copies to
the Purchaser of such receipts or other appropriate evidence of payment
thereof as the Purchaser shall reasonably request.
3.2.7 The Purchaser shall deliver to the Seller instruments, in
such form as in each case as is satisfactory to the Seller, as shall be
sufficient to effect the assumption by Purchaser of the Assumed
Liabilities.
3.2.8 The Purchaser and the Seller shall execute and deliver a
cross receipt acknowledging receipt from the other, respectively, of the
Purchased Assets and the Purchase Price.
4.0 REPRESENTATIONS AND WARRANTIES OF THE SELLER
9
<PAGE>
In order to induce the Purchaser to enter into this Agreement and to
consummate the transactions contemplated hereunder, the Seller makes the
following representations and warranties:
4.1 ORGANIZATION, POWER AND AUTHORITY OF THE SELLER. The Seller is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and is duly qualified to transact business and is in
good standing in each jurisdiction where the character of its activities so
requires, except to the extent that any failure to so qualify has not had, and
could not reasonably be expected to have, a Material Adverse Effect (as defined
in Section 12.15 below). The Seller has full corporate power and authority (i)
to own or lease the Purchased Assets being transferred by it and to conduct its
Businesses as now being conducted, (ii) to enter into this Agreement and to
sell, convey, transfer, assign and deliver the Purchased Assets being
transferred by it to the Purchaser as provided herein, and (iii) to carry out
the other transactions and agreements contemplated hereby.
4.2 SUBSIDIARIES. The Purchased Assets do not include any capital stock
or ownership interest in any other entity. The Excluded Subsidiaries (i) as of
the Closing Date, will not own or possess any assets that are utilized in or
necessary to the operation of the Businesses and (ii) are not material to the
Businesses either individually or in the aggregate.
4.3 FINANCIAL SUMMARIES. Schedule 4.3 contains:
4.3.1 a statement of income and operating expenses of the
Businesses for each of the years ended December 31, 1994 and 1995
("Statement of Operations");
4.3.2 a statement of assets and liabilities of the Businesses as of
December 31, 1995 ("Statement of Assets and Liabilities"); and
4.3.3 a statement of assets and liabilities of the Businesses as of
March 31, 1996 ("Interim Statement").
The Statement of Operations, the Statement of Assets and Liabilities and the
Interim Statement (hereinafter sometimes referred to together as the "Financial
Summaries") have been prepared by UNR's management in accordance with generally
accepted accounting principles for divisional enterprises and in accordance with
UNR's accounting policies and procedures (except that the Financial Summaries do
not reflect any reserves for obsolete or slow-moving inventory), consistently
applied, and are based on books and records of the Seller relating to the
Businesses which have been prepared on a consistent basis, and have not been
derived from financial information which has been audited by UNR's independent
public accountants for the purpose of expressing an audit on the separate
financial statements of the Businesses. The Financial Summaries in each case
fairly present, as of their respective dates, the assets and liabilities and the
operations, respectively, of the Businesses.
4.4 LIABILITIES OF THE BUSINESSES. The Seller has no liabilities or
obligations relating to the Businesses or the Purchased Assets except: (i) to
the extent reflected in the Interim
10
<PAGE>
Statement; (ii) to the extent specifically disclosed herein or in or
incorporated by express reference in any of the Schedules attached hereto; and
(iii) normal liabilities incurred in the ordinary course of business.
4.5 TAX MATTERS.
4.5.1 With respect to the Purchased Assets and the operation of the
Businesses, UNR has timely filed all tax returns and reports required to be
filed by it and any corporation with which it files consolidated, combined
or unitary returns, including without limitation, all federal, state, local
and foreign income tax returns, all sales and use tax, gross receipts,
property, payroll and other tax returns, and has paid in full or made
adequate provision by the establishment of reserves for all such taxes and
other charges which have become due. The Seller has no knowledge of any
tax deficiency proposed or threatened against the Purchased Assets and
there are no tax liens upon any of the Purchased Assets. UNR has made all
payments or deposits when due of estimated taxes with respect to the
Purchased Assets and the Businesses in amounts sufficient to avoid the
imposition of any penalty or lien.
4.5.2 All taxes and other assessments and levies with respect to
the Purchased Assets and the operation of the Businesses which the Seller
was required by law to withhold or to collect have been duly withheld and
collected, and have been paid over to the proper governmental entity or are
being held by the Seller for such payment.
4.6 REAL ESTATE OF THE BUSINESSES.
4.6.1 Schedule 4.6 sets forth descriptions of the Purchased Real
Estate and the nature and amount of any mortgages, tax liens or other liens
thereon. Schedule 4.6 also identifies each parcel of the Purchased
Leasehold Premises and the date and term of each lease and any amendments
or modifications, the lessee and lessor, the location, including address
and a brief description thereof (including approximate square footage and
usage). The Purchased Real Estate and the Purchased Leasehold Premises
comprise all of the real property used in the operation of the Businesses.
4.6.2 The Seller has good and marketable title to the Purchased
Real Estate and a valid and enforceable leasehold interest in the Purchased
Leasehold Premises, free and clear of all liens, mortgages, pledges,
encumbrances, charges, assessments, restrictions, covenants, claims and
easements or title defects of any nature whatsoever, except for liens set
forth on Schedule 4.6, liens for real estate taxes not yet due and payable,
and such imperfections of title and encumbrances, if any, as (individually
and in the aggregate) are not substantial in character, amount or extent
and do not materially detract from the value, or materially interfere with
the present use, of the Purchased Real Estate or the Purchased Leasehold
Premises or otherwise impair the operations of the Businesses in any
material respect.
11
<PAGE>
4.6.3 The buildings and related improvements located on the
Purchased Real Estate and the Purchased Leasehold Premises are in good
operating condition, normal wear and tear excepted, and are sufficient to
satisfy and serve the current levels of operations of the Businesses.
4.6.4 The Seller has not received any notice of: (i) any
condemnation proceeding with respect to any portion of the Purchased Real
Estate or the Purchased Leasehold Premises or the buildings and related
improvements thereon and to the best knowledge of the Seller no proceeding
is contemplated by any governmental authority; or (ii) any special
assessment which may affect the Purchased Real Estate or the Purchased
Leasehold Premises and to the best knowledge of the Seller no such special
assessment is contemplated by any governmental authority.
4.7 GOOD TITLE TO THE PURCHASED ASSETS. The Seller has good and
marketable title to all of the Purchased Assets (other than the leased personal
property constituting part of the Purchased Assets, as to which the Seller has a
valid and enforceable leasehold interest), free and clear of all liens,
mortgages, pledges, encumbrances, claims or charges of every kind, nature, and
description whatsoever, except those set forth in Schedule 4.7.
4.8 INVENTORIES. Except as set forth on Schedule 4.8 hereto, the
inventories of the Seller relating to the Businesses (i) are sufficient for the
operation of the Businesses in the ordinary course consistent with past
practice, (ii) are of a quality and quantity presently usable or saleable in the
ordinary course of business of the Businesses and (iii) are valued on the books
and records of the Businesses at cost, with cost determined under an inventory
valuation method consistent with past practice. No previously sold inventory is
subject to returns in excess of those historically experienced by the
Businesses.
4.9 ACCOUNTS RECEIVABLE. The accounts receivable of the Seller relating
to the Businesses arose from bona fide transactions in the ordinary course of
business and have been executed on terms consistent with the past practice of
the Businesses.
4.10 LICENSES AND PERMITS. The Seller possesses all licenses and other
required governmental or official approvals, permits or authorizations, the
failure to possess which has had or could reasonably be expected to have a
Material Adverse Effect. All such licenses, approvals, permits and
authorizations are described in Schedule 4.10 hereto and are in full force and
effect, the Seller is in compliance in all material respects with their
requirements, and no proceeding is pending or, to the knowledge of the Seller,
threatened to revoke or amend any of them. The Purchased Real Estate is zoned
in such a manner to support the current use of the Purchased Real Estate and
there exists no material violation of any requirement or condition to such
zoning classification which is applicable to the Purchased Real Estate.
4.11 PROPRIETARY RIGHTS.
4.11.1 Schedule 1.1.8 contains a complete list of all of the
Purchased Proprietary Rights and a list of jurisdictions in which the
Seller is operating the
12
<PAGE>
Businesses under a trade name, and each jurisdiction in which any such
trade name is registered.
4.11.2 The Seller is the sole owner, legally and beneficially, and
has good and marketable title to the Purchased Proprietary Rights free and
clear of any and all liens, pledges, obligations, charges, mortgages,
agreements, claims, liabilities, licenses, restrictions and encumbrances of
any kind or nature whatsoever. Except as set forth on Schedule 1.1.8, to
the best knowledge of the Seller, no third party claims any rights in or to
the Purchased Proprietary Rights.
4.11.3 Upon the sale, assignment, transfer and conveyance by Seller
of the Purchased Proprietary Rights to Purchaser hereunder, Purchaser will
have good and marketable title to all of such Purchased Proprietary Rights,
free and clear of all liens, pledges, obligations, charges, mortgages,
agreements, claims, liabilities, licenses, restrictions and encumbrances of
any kind or nature whatsoever.
4.12 PURCHASED CONTRACTS. Schedule 1.1.6 sets forth (a) a true, correct
and complete list of each of the contracts, agreements, commitments,
arrangements, understandings, or other instruments (in each case whether oral or
written) relating to the Businesses (including every amendment, modification or
supplement to the foregoing) (i) which involves an annual payment to or by the
Seller in excess of $10,000, (ii) which requires more than 90 days prior notice
by the Seller to terminate without any liability to the Seller, (iii) which
limits or restricts the Seller from engaging in any business in any jurisdiction
or (iv) which is material to the Businesses and (b) a list of all consents or
notices required to be obtained or given under such Purchased Contracts, the
employee benefit plans listed in Schedule 4.21 and the leases relating to the
Purchased Leasehold Premises (the "Purchased Leases") in connection with the
transactions contemplated herein. The Purchased Contracts and the Purchased
Leases are valid and enforceable in accordance with their respective terms with
respect to the Seller and, to the best knowledge of Seller, each other party
thereto (except as enforceability may be limited by laws affecting creditors'
rights or by equitable principles).
4.13 ADEQUACY OF THE PURCHASED ASSETS. The Purchased Assets constitute,
in the aggregate, all of the property necessary for the conduct of the
Businesses as conducted since December 31, 1995. No person other than the
Seller owns any equipment or other tangible assets or properties situated on the
premises of the Seller which are utilized in the operation of the Businesses.
No assets utilized in the operation of the Businesses are in the possession of
any third party.
4.14 INSURANCE. The Purchased Assets and third-party claims are insured
or insured against by financially sound and reputable insurers to the extent and
in the manner that is customary for companies engaged in a business similar to
each of the Businesses except to the extent that such Purchased Assets or claims
are self-insured. Seller will maintain such coverage in force up to the Closing
Date. The interest of Seller in such insurance policies will not be transferred
hereunder and Purchaser shall not be subrogated to the rights of Seller
thereunder.
13
<PAGE>
4.15 LITIGATION. Except as set forth in Schedule 4.15, there are no
actions, suits, claims, governmental investigations or arbitration proceedings
pending or, to the knowledge of the Seller, relating to, threatened against or
affecting the Businesses or any of the Purchased Assets.
4.16 NO MATERIAL ADVERSE CHANGE. Since the date of the Interim
Statement, there has not been any event or condition having a Material Adverse
Effect. To the best knowledge of the Seller, there is no threatened or
prospective event or condition which could reasonably be expected to have a
Material Adverse Effect.
4.17 ABSENCE OF CERTAIN ACTS OR EVENTS. Except as expressly disclosed in
Schedule 4.17, since December 31, 1995, the Seller has not: (i) committed to or
paid any bonus or increased the rate of compensation or profit sharing of any of
the employees of any of the Businesses, except in the ordinary course and
consistent with past practice; (ii) sold, transferred, disposed of, mortgaged,
pledged or made subject to a lien any of the assets of any of the Businesses
other than in the ordinary course of business; (iii) made or obligated itself to
make capital expenditures with respect to the Businesses aggregating more than
$500,000; (iv) incurred any material obligations or liabilities (including any
indebtedness) or entered into any material transaction with respect to the
business and operations of the Businesses or the Purchased Assets, except for
this Agreement and the transactions contemplated hereby; (v) suffered any theft,
damage, destruction, casualty or other loss with respect to the Businesses or
the Purchased Assets in excess of $100,000 in the aggregate, (vi) written off as
uncollectible any guaranteed checks, notes or accounts receivable, except in the
ordinary course of business consistent with past practice, (vii) written down
the value of any asset or investment on the books or records of the Businesses,
except for depreciation and amortization taken in the ordinary course of
business consistent with past practice, (viii) increased any reserves for
contingent liabilities (excluding any adjustment to bad debt reserves in the
ordinary course of business consistent with past practice), (ix) entered into
any agreements to do any of the foregoing or (x) experienced any other events,
developments or conditions of any character that have had or could reasonably be
expected to have a Material Adverse Effect. Since the date of the Interim
Statement, the Seller has (x) maintained supplies and inventory of the
Businesses at levels that are in the ordinary course of business consistent with
past practice, (y) extended credit to customers, collected accounts receivable
and paid accounts payable and similar obligations in the ordinary course of
business consistent with past practice and (z) conducted the Businesses in the
ordinary course on a basis consistent with past practice and not engaged in any
new line of business or entered into any agreement, transaction or activity or
made any commitment with respect to the Businesses except those in the ordinary
course of business.
14
<PAGE>
4.18 COMPLIANCE WITH LAWS.
4.18.1 Except as set forth in Schedule 4.18, the Seller is in
compliance in all material respects with all laws, regulations and orders
applicable to the operations of the Businesses or the Purchased Assets.
The Seller has not received notification of any asserted past or present
failure to comply with any such laws and to the best knowledge of the
Seller, no proceeding with respect to any such violation is contemplated.
4.18.2 Neither the Seller, nor, to Seller's knowledge, any employee
of any of the Businesses, has made any payment of funds in connection with
the Businesses prohibited by law, and no funds have been set aside to be
used in connection with any of the Businesses for any payment prohibited by
law.
4.19 ENVIRONMENTAL MATTERS.
4.19.1 Except as disclosed on Schedule 4.19 hereto: (i) to the
knowledge of the Seller, (A) the business and operations of the Businesses
are not in violation in any material respect of any applicable
Environmental Law in effect as of the date hereof; (B) each Business is in
possession of all Environmental Permits required under any applicable
Environmental Law for the conduct or operation of its business (or any part
thereof), and each Business is in all material respects in compliance with
all of the requirements and limitations included in such Environmental
Permits; (C) none of the Businesses stores or uses any petroleum or
hazardous or toxic wastes, substances or materials; (ii) none of the
Businesses has received any notice from any governmental authority or any
private person or entity that its business or operations are in violation
of any Environmental Law or any Environmental Permit or that it is
responsible (or potentially responsible) for the cleanup of any petroleum
or hazardous or toxic wastes, substances or materials; (iii) none of the
Businesses is the subject of any pending or threatened federal, state,
local or private litigation or proceedings involving a demand for damages
or other potential liability arising under any Environmental Laws; and (iv)
none of the Businesses or, to the knowledge of the Seller, any prior owner
or operator of the Purchased Real Estate or the Purchased Leasehold
Premises, has buried, dumped, disposed of, or spilled or released material
quantities of any pollutants, contaminants, petroleum or hazardous or toxic
wastes, substances or materials at the Purchased Real Estate or the
Purchased Leasehold Premises. No violation of or notice of violation of
any Environmental Law, or litigation arising under any Environmental Law
shall be implied unless specifically described as a "violation," "notice of
violation," or "litigation" on Schedule 4.19.
4.19.2 For purposes of this Agreement: (i) "Environmental Law"
means any law, statute, regulation or order, consent decree or settlement
agreement which relates to or otherwise imposes liability or standards of
conduct concerning discharges, emissions, releases or threatened releases
of noises, odors or any
15
<PAGE>
pollutants, contaminants or hazardous or toxic waste, substances or
materials, whether or not as matter or energy, into ambient air, water, or
land, or otherwise relating to the manufacture, processing, generation,
distribution, use, treatment, storage, disposal, clean-up, transport or
handling of pollutants, contaminants, petroleum or hazardous or toxic
waste, substances or materials, including (but not limited to) the
Comprehensive Environmental Response, Compensation and Liability Act of
1980 ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986,
as amended, the Resource Conservation and Recovery Act of 1976, as amended,
the Toxic Substances Control Act, as amended, the Clean Water Act, as
amended, the Clean Air Act, as amended, the Occupational Safety and Health
Act, as amended, any so-called "Super Lien" law and any other similar
federal, state or local statutes and all regulations, orders and guidelines
adopted in respect to the foregoing statues; and (ii) "Environmental
Permit" means any permit, license, approval, consent or other authorization
required by or pursuant to any applicable Environmental Law.
4.20 EMPLOYEE MATTERS; LABOR RELATIONS.
4.20.1 Except as set forth on Schedule 4.20, none of the employees
of any of the Businesses is covered by employment contracts except
customary written and non-written understandings concerning employment,
terminable at will without cost or other liability, nor are any of the
employees of any of the Businesses members of any union or covered by union
contracts, nor is the Seller aware of any plan or solicitation of employees
of any of the Businesses to form or join a union in the past 24 months.
Except as set forth on Schedule 4.20, the Seller is not a party to or bound
by any employment agreement (oral or written) or any collective bargaining
or other labor agreement with respect to any of the Businesses that could
in any way affect Purchaser, the Purchased Assets or any employees of such
Business which Purchaser may hire after the Closing.
4.20.2 With respect to the employees of the Businesses, Seller is
in compliance in all material respects with the Immigration Reform and
Control Act of 1986, as amended, and Seller has complied in all material
respects with all applicable federal, state and local laws relating to the
employment of labor, including without limitation, the provisions thereof
relating to wages, non-discriminatory hiring, promotional and employment
practices and procedures, collective bargaining and payment of Social
Security, unemployment compensation, worker's compensation and similar
taxes, including withholding for income taxes, and Seller is not presently
liable to any person or governmental agency for any arrears of wages or
subject to any liabilities or penalties for failure to comply with any of
the foregoing laws. With respect to the employees of the Businesses and
except as may be set forth on Schedule 4.20 or Schedule 4.15, there are no
outstanding charges or claims of a material nature against the Seller or
any of its officers, directors, agents or employees involving any alleged
or actual violation of any provision of the National Labor Relations Act,
the Age Discrimination in Employment Act, the Equal Employment Opportunity
Act of
16
<PAGE>
1964, the Fair Labor Standards Act, or any other applicable federal, state
or local law concerning employment of labor; nor, to the knowledge of the
Seller, has there been any threat of any such claim or charge.
4.21 EMPLOYEE BENEFITS. Schedule 4.21 contains a list of all employee
benefit plans applicable to employees of the Businesses. The term "employee
benefit plans," as used herein, includes all written or oral plans, contracts,
policies or other arrangements of benefit or advantage to any current or former
employee or any class of current or former employees of the Businesses (and
their dependents) including, without limitation, stock option, bonus, management
incentive, profit sharing, pension plan, deferred compensation, retirement,
medical, disability, life and other insurance, severance and termination and
income protection arrangements. Summaries of such employee benefit plans have
been provided to Purchaser and copies of all such written employee benefit plans
and descriptions of non-written employee benefit plans and all Internal Revenue
Service, Department of Labor or Pension Benefit Guaranty Corporation ("PBGC")
rulings or determinations, annual reports, summary plan descriptions, actuarial
and other financial reports with respect to such employee benefit plans will be
provided upon Purchaser's request. Except as set forth on Schedule 4.21, all
obligations of each of the Seller and its affiliates, whether arising by
operation of law, by contract or by past custom, for payments by such employer,
with respect to unemployment compensation benefits, pension and retirement
benefits, social security benefits, or other benefits for the current or former
employees of the Businesses or their dependents, whether under such employer's
benefit plans or otherwise with respect to such plans, including, without
limitation, those set forth on Schedule 4.21, in respect of periods prior to the
Closing Date, have been paid or shall be paid when due by such employer or, if
assumed by Purchaser, properly accrued and reflected in the Interim Statement.
Except as provided in Section 6.7 hereof, the transactions contemplated by this
Agreement will not result in the imposition of any liability or obligation on
Purchaser as a successor to Seller or otherwise with respect to the employee
benefit plans set forth on Schedule 4.21 or any other employee benefit plans or
policies of the Seller or an ERISA Affiliate (as defined below), including plans
subject to Title IV of ERISA, and Seller shall promptly pay or discharge any
such liability or obligation and defend and hold Purchaser harmless from any
liability, obligation or loss resulting therefrom. "ERISA Affiliate" shall mean
any trade or business (whether or not incorporated) which, together with the
Seller, is a member of a group described in Section 414(b), (c), (m) or (o) of
the Code. No liability on the part of Seller to the PBGC, other than applicable
insurance premiums, has been or could reasonably be expected to be incurred with
respect to any such plan at or prior to the Closing. Except for events which
have been reported (or with respect to which the reporting requirement has been
waived), there has been no reportable event (as described in Section 4043(b) of
ERISA) with respect to any such plan, nor has any notice as to liability under
Subtitle D of Title IV of ERISA been received by the Seller, and there are no
circumstances that might result in the imposition of a lien on any of the
Purchased Assets pursuant to ERISA, the Code or any other applicable law or
regulation. A principal purpose of the transactions described or contemplated
in this Agreement is not to evade or avoid liability under ERISA. Except as set
forth in Schedule 4.21, neither the Seller nor any ERISA Affiliate makes or has
made or has or has had an obligation to make (directly or indirectly, through
reimbursement or otherwise) contributions on behalf of current or former
employees of the Businesses to a multiemployer plan within the meaning of
Section 4001(a)(3) of ERISA and with respect to each employee benefit plan of
the Seller or an ERISA Affiliate that is subject to
17
<PAGE>
Title IV of ERISA and that benefits current or former employees of the
Businesses (other than the Pension Plan, as defined in Section 6.7.8), the fair
market value of the assets of such plan is at least equal to the present value
of the "benefit liabilities" within the meaning of Section 4001(a)(16) of ERISA
(whether or not vested) under such plan as determined as of the most recent
valuation date and using the assumptions that would be used by the PBGC in the
event of a plan termination as of such date. The Pension Plan (as defined in
Section 6.7.8) is subject to a favorable determination letter that considers the
effect of the Tax Reform Act of 1986 and any other legislation and rulings
described in Treasury Regulation section 1.401(b)-1(b)(ii), the Technical and
Miscellaneous Revenue Act of 1988, the Omnibus Budget Reconciliation Act of
1989, the Unemployment Compensation Act of 1992 and the Omnibus Budget
Reconciliation Act of 1993. Seller is not required to make quarterly
contributions (within the meaning of Section 412 of the Code) to the Pension
Plan and is not required to pay additional premiums (within the meaning of
Section 4006(a)(3)) to the PBGC with respect to Pension Plan participants.
4.22 OFFICERS AND EMPLOYEES. Schedule 4.22 contains a true and complete
list of (a) all of the officers of the Division involved in the operation of the
Businesses specifying their office and annual rate of compensation, (b) all of
the salaried employees of the Seller involved in the operation of the Businesses
as of the date hereof together with an appropriate notation next to the name of
any employee on such list to whom the Seller has made verbal commitments which
are binding on the Seller and (c) all former employees of the Division involved
in the operation of the Businesses entitled to post-retirement benefits or any
other compensation.
4.23 PRODUCT RECALLS. There has not been any product recall, or post-
sale warning or similar action (collectively, "recalls") conducted with respect
to any product manufactured, shipped, delivered or sold by any of the
Businesses, or, to the knowledge of the Seller, any investigation or
consideration of, or decision made by, any of the Businesses concerning whether
or not to undertake any recalls.
4.24 ABSENCE OF DEFAULTS. The Seller is not in material default under
any contract, order, lease, commitment or agreement included in the Purchased
Assets and no condition exists which, with the giving of notice or passage of
time or both, would constitute a material default thereunder or constitute an
event creating rights of acceleration, termination or cancellation thereof. To
the best of Seller's knowledge, there are no existing material defaults by any
third party under any contract, order, lease, commitment or agreement included
in the Purchased Assets and no condition exists which, with the giving of notice
or passage of time or both, would constitute a material default thereunder or
constitute an event creating rights of acceleration, termination or cancellation
thereof.
4.25 DUE AUTHORIZATION; BINDING OBLIGATION. The execution, delivery and
performance of this Agreement and each of the other agreements contemplated
hereby and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action of Seller. This Agreement has
been duly executed and delivered by Seller and is a valid and binding obligation
of Seller, enforceable in accordance with its terms. Neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will: (i) conflict with or violate any provision of Seller's certificate
of incorporation or bylaws, or of any law, ordinance or regulation or any decree
or order of any court
18
<PAGE>
or administrative or other governmental body which is either applicable to,
binding upon or enforceable against the Seller or requires any filing or
authorization under any applicable law, ordinance or regulation (assuming the
accuracy of Purchaser's representation and warranty in Section 5.4 hereof); or
(ii) result in any breach of or default under any mortgage, contract, agreement,
indenture, will, trust or other instrument which is either binding upon or
enforceable against the Seller or the Purchased Assets (except that security
interests in certain of the Purchased Assets may not have been released by the
date of execution hereof, but will be so released at or prior to Closing).
4.26 TRANSACTIONS WITH AFFILIATES. Except as set forth in Schedule 4.26,
no officer or director of the Seller or any person with whom any such officer or
director has any direct or indirect relation by blood, marriage or adoption, or
any entity in which the Seller or any such person owns any beneficial interest
(other than a publicly held corporation whose stock is traded on a national
securities exchange or in the over-the-counter market and less than 5% of the
stock of which is beneficially owned by all such persons), or any affiliate of
any of the foregoing or any current or former affiliate of the Seller has any
interest in: (a) any contract, arrangement or understanding with, or relating
to, the Businesses, the Purchased Assets or the Assumed Liabilities; (b) any
loan, arrangement, understanding, agreement or contract for or relating to the
Businesses or the Purchased Assets; or (c) any property (real, personal or
mixed) tangible or intangible, used or currently intended to be used in the
Businesses. To Seller's knowledge, the aggregate of prices at which the
Businesses are currently obtaining steel tubing from the Seller's Leavitt
Division is not materially below the aggregate of prices at which tubing could
be obtained from independent suppliers on an arms' length basis.
4.27 TRUE AND COMPLETE COPIES. Copies of documents delivered and to be
delivered hereunder by Seller are and will be true and complete copies of such
documents.
4.28 LIMITATIONS ON SELLER'S REPRESENTATIONS AND WARRANTIES.
4.28.1 To the extent that Seller's representations and warranties
expressed herein are qualified by reference to Seller's knowledge, such
reference shall be limited to the actual knowledge of the individuals set
forth on Schedule 4.28.
4.28.2 The representations and warranties set forth in this Article
4.0 are the only representations and warranties made by the Seller with
respect to the Businesses and the Purchased Assets. Except as specifically
set forth herein, the Seller is selling the Purchased Assets to the
Purchaser "as is" and with all faults.
19
<PAGE>
5.0 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
In order to induce the Seller to enter into this Agreement and to
consummate the transactions contemplated hereunder, Purchaser makes the
following representations and warranties:
5.1 ORGANIZATION, POWER AND AUTHORITY OF THE PURCHASER. Purchaser is a
limited partnership duly organized and validly existing under the laws of
Georgia, with full power and authority to enter into this Agreement and perform
its obligations hereunder.
5.2 DUE AUTHORIZATION; BINDING OBLIGATION. The execution, delivery and
performance of this Agreement and all other agreements contemplated hereby and
the consummation of the transactions contemplated hereby have been duly
authorized by all necessary action of Purchaser. This Agreement has been duly
executed and delivered by Purchaser and is a valid and binding obligation
enforceable in accordance with its terms. Neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby
will: (i) conflict with or violate any law, statute, rule or regulation to
which the Purchaser is subject, or any provision of the partnership agreement or
other constituent instruments of Purchaser, or of any decree or order of any
court or administrative or other governmental body which is either applicable
to, binding upon or enforceable against Purchaser, or (ii) result in any breach
of or default under any mortgage, contract, agreement, indenture, will, trust or
other instrument which is either binding upon or enforceable against Purchaser.
5.3 INVESTIGATION BY PURCHASER. Purchaser has conducted an
investigation of the Purchased Assets and of the operations of the Businesses.
Purchaser has reviewed all of the documents, records, reports and other material
identified in the Exhibits and Schedules hereto, and is familiar with their
content. For the purpose of conducting these investigations, Purchaser has
employed the services of its own agents, representatives, counsel, experts and
consultants. Purchaser has relied upon information supplied by the Seller as
set forth herein and in the Exhibits and Schedules hereto and has not relied
upon any other information or statement, oral or written, not described herein
or not included in a Schedule attached hereto.
5.4 HART-SCOTT-RODINO. No filings by Purchaser or Seller or any
affiliate thereof are required under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 and the rules and regulations thereunder (the "HSR
Act") in connection with the transactions contemplated by this Agreement.
Purchaser is an "ultimate parent entity" and has annual net sales and total
assets of less than $10,000,000, respectively, all as determined in accordance
with the HSR Act.
5.5 CONFIDENTIALITY. Purchaser agrees that it will (and that it has
obtained and in the future will obtain the agreement of all potential financing
sources to which it has supplied or will supply information concerning the
transactions contemplated hereby and concerning the Seller, the Division and the
Businesses their agreement to) abide by the terms of confidentiality agreement
between an affiliate of the Purchaser and J.P. Morgan Securities Inc. dated
February 21, 1996 (the "Confidentiality Agreement").
20
<PAGE>
6.0 ADDITIONAL COVENANTS OF THE PARTIES
6.1 ALL REASONABLE EFFORTS. Each party hereto will use all reasonable
efforts to cause to be satisfied as soon as practicable and prior to the Closing
Date all of the conditions to its respective obligations to consummate the sale
and purchase of the Purchased Assets. Each party hereto shall also execute
prior to or after the Closing Date such other documents or agreements and take
such other actions as may be reasonably necessary or desirable for the
implementation of this Agreement and the consummation of the transactions
contemplated hereby.
6.2 CONDUCT OF BUSINESS PENDING THE CLOSING. From and after the
execution and delivery of this Agreement and until the Closing Date, except as
otherwise provided by the prior written consent of the Purchaser:
6.2.1 the Seller will conduct the business and operations of the
Businesses in the manner in which the same have heretofore been conducted
and as described to the Purchaser, and it will use all reasonable efforts
to (i) preserve the business organization of the Businesses intact, (ii)
keep available to the Purchaser the services of the employees and agents of
the Businesses, and (iii) preserve the relationships with the customers of
the Businesses, suppliers and others having dealings with the Businesses;
6.2.2 the Seller will maintain all of the properties of the
Businesses in customary repair, order and condition, reasonable wear and
use and damage by unavoidable casualty excepted, will maintain supplies and
inventory of the Businesses at levels that are in the ordinary course of
business and consistent with past practice, and will maintain insurance of
such types and in such amounts upon all of the properties of the Businesses
and with respect to the conduct of the operations of the Businesses as are
in effect on the date of this Agreement;
6.2.3 the Seller will not (i) pay any bonus or increase the rate of
compensation of any of the employees of any of the Businesses other than in
the ordinary course of business; (ii) sell or transfer any of the assets of
any of the Businesses other than in the ordinary course of business; (iii)
make or obligate itself to make capital expenditures with respect to the
Businesses aggregating more than $500,000; or (iv) with respect to the
operations of any of the Businesses, incur any material obligations or
liabilities or enter into any material transaction;
6.2.4 the Seller will not enter into, modify or extend in any
manner the terms of any employment, severance or similar agreements with
officers, directors or employees;
6.2.5 the Seller will continue to extend customer credit, collect
accounts receivable and pay accounts payable and similar obligations in the
ordinary course of business consistent with past practice;
21
<PAGE>
6.2.6 the Seller will not amend or modify any employee benefit plan
listed on Schedule 4.21 or commit to make any amendment to any such
employee benefit plan or adopt any new employee benefit plan for the
benefit of any employees of the Businesses;
6.2.7 the Seller will perform in all material respects all of its
obligations under, and not default or suffer to exist any event or
condition which with notice or lapse of time or both would constitute a
default under, any Purchased Contracts or any lease relating to the
Purchased Leasehold Premises (except those being contested in good faith)
and not amend any contract or commitment that is or would be a Purchased
Contract or a lease of real property for use in or relating to the
Businesses;
6.2.8 the Seller will continue its cash management practices in the
ordinary course of business consistent with past practice; and
6.2.9 the Seller will promptly notify the Purchaser of any event or
occurrence that has had or could reasonably be expected to have a Material
Adverse Effect.
6.3 ACCESS TO THE PROPERTIES AND RECORDS OF THE BUSINESSES. From and
after the execution and delivery of this Agreement, the Seller will afford to
the representatives of the Purchaser access, during normal business hours and
upon reasonable notice, to the premises of the Businesses and its employees,
counsel and accountants sufficient to enable the Purchaser to inspect the
Purchased Assets and evaluate the Businesses, and furnish to such
representatives during such period all such information relating to the
foregoing investigation as the Purchaser may reasonably request; provided,
however, that the Purchaser will hold in strict confidence all documents and
information concerning the Businesses so furnished at any time by Seller, and,
if the sale of the Purchased Assets pursuant hereto shall not be consummated,
such confidence shall be maintained and the Purchaser will not use or disclose
to any person any such document or information (except to the extent that such
information can be shown to be previously known to the Purchaser, in the public
domain, or later acquired by the Purchaser from other legitimate sources).
6.4 NO DISCLOSURE. Neither party hereto will, prior to the Closing
Date, disclose the existence of or any term or condition of this Agreement to
any person or entity without the prior written consent of the other party,
except that such disclosure may be made (i) to any person to whom such
disclosure is necessary in order to satisfy any of the conditions to the
consummation of the purchase of the Purchased Assets which are set forth in this
Agreement, (ii) to the extent the party making such disclosure believes in good
faith that such disclosure is required by law (in which case, such party will
consult with the other party prior to making such disclosure) and (iii) to any
person considering providing financing to the Purchaser in connection with the
transactions contemplated herein; provided that any such persons agree to be
bound to keep the terms and conditions of this Agreement confidential and
otherwise abide by the terms of the Confidentiality Agreement.
22
<PAGE>
6.5 BULK SALES LAW. The Purchaser and the Seller hereby waive
compliance with the bulk sales law of any applicable state in connection with
the transactions contemplated by this Agreement.
6.6 EXPENSES. Purchaser, on the one hand, and Seller, on the other
hand, shall each bear its own respective expenses incurred in connection with
this Agreement and in connection with all obligations required to be performed
by each of them under this Agreement.
6.7 EMPLOYEE MATTERS.
6.7.1 Purchaser shall offer at will employment effective on the
Closing Date, to all regular full time and part time employees of the
Businesses as of the Closing Date (including employees on short term
disability or on leave required by the Family and Medical Leave Act when
the short term disability or leave period terminates). Such offers shall
be at substantially equivalent salary and wage compensation to the
compensation currently paid to such employees. Those employees who accept
employment with the Purchaser are referred to herein as the "Continued
Employees."
6.7.2 For a period of one year after the Closing Date, Purchaser
shall provide at its sole expense, for the benefit of the Continued
Employees, benefit plans, policies and procedures that provide the
Continued Employees with benefits that, taken as a whole, are substantially
as favorable to the Continued Employees in the aggregate as the benefit
plans, policies and procedures currently available to the Continued
Employees. Purchaser agrees that the medical, life and disability benefits
provided to or on behalf of the Purchaser to Continued Employees and their
dependents will contain a waiver of any pre-existing condition exclusion
for Continued Employees and their dependents and will not require proof of
insurability for Continued Employees or their dependents, and further
agrees that Continued Employees shall receive credit for their service with
Seller for participation and vesting purposes under any qualified pension
or profit-sharing plans. Seller shall pay all bonuses for 1996 under the
UNR Industries, Inc. Key Management Variable Compensation Plan due to
employees of the Businesses through the last day of the month in which the
Closing Date occurs (calculated on the basis of the results of the
Businesses through such month-end), and Purchaser shall pay all such
bonuses due to Continued Employees from such month-end through December 31,
1996 (calculated on the basis of the results of the Businesses for that
period).
6.7.3 Purchaser and Seller agree that, except as specifically
provided otherwise in this Agreement and except for continuation of
coverage required to be offered by Seller under the terms of an applicable
employee benefit plan of any such employer or otherwise required by law,
the provision of employee benefits to Continued Employees with respect to
benefits accrued on and after the Closing Date shall be the sole
responsibility of Purchaser. The Seller shall be solely responsible for
providing any employee benefits accrued or related to periods prior
23
<PAGE>
to the Closing Date (including any continuation of health care coverage
required by law to be provided to employees) other than benefits to be
provided under the Pension Plan as contemplated by Section 6.7.8. For
purposes of this Section 6.7.3, (i) a claim for health benefits shall
accrue on the date on which the medical service is rendered, and a claim
for a disability benefit shall accrue on the date on which the period of
the employee's inability to work based on such disability began and
(ii) the foregoing notwithstanding, the Seller will be responsible for and
pay any and all workers' compensation and similar claims asserted by or
with respect to any employee or former employee of the Businesses in
respect of any injury or other compensable event or occupational illness or
disease which occurred or is solely attributable to any event, state of
facts or condition which existed or occurred in whole prior to the Closing.
The Purchaser will be responsible for and pay any and all workers'
compensation and other similar claims asserted by or with respect to any
Continued Employee in respect of any injury or other compensable event or
occupational illness or disease which occurred or is attributable to any
event, state of facts or condition which existed or occurred in whole after
the Closing. If any such injury or other compensable event or occupational
illness or disease of a person who was employed both by the Seller prior to
the Closing and by the Purchaser after the Closing is attributable in part
to causes occurring subsequent to the Closing and is the basis of a
workers' compensation or other similar claim asserted within three years
after the Closing Date, then liability for any such claim shall be shared
by the Seller and the Purchaser in the proportion of the periods of
employment of the employee concerned by the Businesses (i) on or prior to
the Closing, and (ii) after the Closing, respectively. The Purchaser shall
be responsible for paying any claim described in the preceding sentence and
the Seller shall reimburse Purchaser on demand to the extent provided in
the preceding sentence.
6.7.4 If Purchaser terminates any of such Continued Employees
within 12 months after the Closing Date for any reason other than
disciplinary reasons or unsatisfactory performance, he or she shall be
entitled to receive the severance benefits set forth on Schedule 6.7.4.
6.7.5 Except as specifically provided otherwise in this Agreement,
neither Purchaser nor Seller will employ or solicit for employment, for a
period of 24 months after the Closing Date, any of the employees of the
other party or its affiliates.
6.7.6 Purchaser agrees to assume UNR's obligations under the Change
of Control Agreement between Seller and Russell Begley dated September 15,
1995, and to indemnify and hold Seller harmless from any amount UNR may be
required to expend as a consequence of such agreement.
6.7.7 Purchaser had been informed of the status of Seller's
negotiations with the United Steelworkers of America regarding a collective
bargaining agreement. From the date hereof, the Seller agrees to keep the
Purchaser advised
24
<PAGE>
regularly on the status of any and all negotiations concerning such collective
bargaining agreement.
6.7.8
6.7.8.1 Notwithstanding anything to the contrary in this
Agreement,at Closing, Purchaser shall become the sponsor of and be
responsible for the payment of benefits under the UNARCO Commercial
Products Defined Benefit Pension Plan (amended and restated February
1, 1989) (the "Pension Plan"); provided that Seller shall remain
responsible for all liabilities arising out of the operation and
administration of the Pension Plan prior to Closing (other than
liabilities for the payment of benefits accrued prior to the Closing
Date but not payable until after the Closing Date). Prior to the
Closing Date, Seller shall contribute the amount of $15,295 to the
Pension Plan, which represents the difference between the fair
market value of the assets of the Pension Plan as of February 1,
1996 and the present value of the "benefit liabilities" (as defined
in Section 4.21 above) to current and former employees and
beneficiaries (whether or not vested) under such Plan as determined
as of such date assuming the Plan terminated on such date and that
the benefit payable to each current and former employee and
beneficiary will be paid to such person in a lump sum on such date
(using the assumptions then in effect under the Pension Plan to pay
lump sums).
6.7.8.2 If Purchaser delivers a notice of intent to terminate
the Pension Plan under Section 4041(b) of ERISA within six calendar
months after the Closing Date and Purchaser promptly completes such
termination (using all reasonable efforts to do so), Seller shall
enter into a commitment to contribute sufficient funds to enable the
Pension Plan to be terminated, which commitment shall satisfy the
requirements of 29 C.F.R. Section 2617.7. If the PBGC does not
permit such commitment to be recognized as a plan asset, Seller
shall take such other action as may reasonably be required to
terminate the Pension Plan, which may include indemnifying Purchaser
against any payments made pursuant to such a commitment made by
Purchaser and/or guaranteeing such commitment (subject to any
required approvals of Purchaser's creditors), re-assuming
sponsorship of the Plan, or making a contribution to the Plan in
such amount as is required to be contributed by the PBGC, provided
that the parties agree to use all reasonable efforts to utilize a
method that minimizes the amount of additional contributions that
must be made to the Pension Plan. It is further agreed that:
26
<PAGE>
(i) to the extent any portion of funds necessary to terminate
the Pension Plan is attributable to accrual of benefits after the
Closing Date and Seller does not reassume sponsorship of the Plan,
Purchaser shall contribute such portion of funds to the Pension
Plan;
(ii) if Purchaser adopts any amendment to the Pension Plan on
or after the Closing Date, other than as required by law, that
increases the accrued benefits, or the value of any alternative form
of benefit, under the Pension Plan, the provisions of this Section
6.7.8.2 shall not apply and Seller's sole responsibility with
respect to additional contributions to the Pension Plan shall be as
described in Section 6.7.8.3 (determined without regard to such
amendment);
(iii) all reasonable actuarial, legal, accounting and other
expenses properly attributable to the termination of the Pension
Plan shall be paid from the assets of the Pension Plan, and taken
into account in determining the amount, if any, required to be
contributed by Seller; however, to the extent Pension Plan assets
are insufficient to pay such expenses when due, or Purchaser
determines that such expenses cannot properly be paid from the
Pension Plan under Title I of ERISA, Seller shall pay such amounts
to Purchaser within five days of written demand therefor;
(iv) Seller shall receive copies of all filings, notices and
correspondence related to the termination of the Pension Plan, and
shall be consulted with respect to Purchaser's response to any
objections raised by any governmental agency or other party with
respect to such termination;
(v) if there are any excess assets remaining after the
satisfaction of all liabilities to participants and beneficiaries
and all expenses of the termination, Purchaser shall pay to Seller
the fair market value of the assets, if any, which are reverted to
Purchaser, reduced by the amount of the excise tax actually imposed
on Purchaser under Section 4980 of the Code and the amount of income
tax (federal, state and local) attributable to such reversion. If
any portion of such excess assets is transferred to a replacement
plan, Purchaser shall pay to Seller an amount equal to one-half the
amount so transferred, after deducting from the amount so
26
<PAGE>
transferred the amount of excise and federal, state and local income
tax actually imposed on such transfer; and
(vi) termination of the Pension Plan and the absence of any
other defined benefit plan for Continued Employees shall not in
itself be considered a breach of Section 6.7.2 hereof, provided
Purchaser otherwise satisfies its obligations under Section 6.7.2
hereof.
6.7.8.3 If Purchaser does not provide notice of intent to
terminate the Pension Plan within six calendar months after the Closing,
Seller shall pay to Purchaser or to the Pension Plan (as directed by
Purchaser) within ten days of written demand therefor such amount as
Purchaser's actuary certifies is the difference between the fair market
value of the assets of the Pension Plan as of the Closing Date and the
present value of the "benefit liabilities" (as defined in Section 4.21
above) to current and former employees and beneficiaries (whether or not
vested) under such Plan as determined as of the Closing Date assuming the
Plan terminated on such date and that the benefit payable to each current
and former employee and beneficiary was paid to such person in a lump sum
on such date (using the assumptions then in effect under the Pension Plan
to pay lump sums). If Seller shall object to the determination made by
Purchaser's actuary, Seller may designate an actuary to determine the
required contribution, and, if those two actuaries are unable to agree upon
an amount, they shall jointly appoint a third actuary who shall resolve the
matter; provided, if payment is actually made more than ten days from
Purchaser's demand, Seller shall pay interest on the amount of the payment
to Purchaser or the Plan at the rate of 7% per annum. All actuaries
referred to herein shall be currently enrolled, and not under suspension,
under Section 3042 of ERISA.
6.8 OBLIGATION TO NOTIFY. Each party shall have the continuing
obligation until the Closing promptly to notify the other party in writing with
respect to any matter hereafter arising or discovered which, if existing or
known at the date of this Agreement, would have been required to be set forth or
described in this Agreement or the Schedules or other attachments annexed
hereto.
27
<PAGE>
6.9 SUPPLEMENTS TO SCHEDULES. From time to time up to the Closing Date,
the Seller will promptly supplement or amend the Schedules which it has
delivered pursuant to this Agreement with respect to any matter hereafter
arising which, if existing or occurring at the date of this Agreement, would
have been required to be set forth or described in such Schedules or which is
necessary to correct any information in such Schedules which have been rendered
inaccurate thereby. No supplement or amendment to any Schedule shall have any
effect for the purpose of determining satisfaction of the conditions set forth
in Section 7.0 or 8.0 of this Agreement unless such supplement or amendment is
accepted by the Purchaser in writing in its reasonable discretion; PROVIDED,
HOWEVER, that if the Closing occurs, all Schedules hereto shall be deemed
amended to reflect any supplements or amendments delivered to Buyer pursuant to
this Section 6.9.
6.10 NO SOLICITATION OF TRANSACTIONS. Neither the Seller nor any of its
affiliates shall directly or indirectly, through any officer, director, agent or
otherwise, initiate, solicit or knowingly encourage (including by way of
furnishing non-public information or assistance), or take any other action to
facilitate knowingly, any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Competing
Transactions (as hereinafter defined), or enter into discussions or negotiate
with any person or entity in furtherance of such inquiries or to obtain a
Competing Transaction, or agree to or endorse any Competing Transaction, or
authorize or permit any of the officers, directors or employees of the Seller or
any of its affiliates or any investment banker, financial advisor, attorney,
accountant or other representative retained by such entities to take any such
action. The Seller shall notify the Purchaser orally (within one business day)
and in writing (as promptly as practicable) of all relevant terms of any such
inquires and proposals which the Seller or any of its affiliates or any such
officer, director, employee, investment banker, financial advisor, attorney,
accountant or other representative may receive relating to any of such matters,
and if such inquiry or proposal is in writing, the Seller shall deliver to the
Purchaser a copy of such inquiry or proposal. For purposes of this Agreement,
"Competing Transaction" shall mean any of the following involving the
Seller: (a) any merger, consolidation, share exchange, business combination,
stock sale or other similar transaction involving the Seller, (b) any sale,
lease, exchange, mortgage, pledge, transfer or other disposition of any material
portion of the Purchased Assets or Businesses in a single transaction or series
of transactions (other than the sale of Purchased Assets contemplated by this
Agreement); or (c) any public announcement of a proposal, plan or intention to
do any of the foregoing or any agreement to engage in any of the foregoing.
Anything to the contrary in this Section 6.10 notwithstanding, the Seller may
take any action with respect to a Competing Proposal of the type specified in
part (a) of the preceding sentence as it may be advised by outside counsel is
required in the fulfillment of fiduciary duties by its Board of Directors.
6.11 INSURANCE. The Seller shall in good faith cooperate with the
Purchaser and take all actions reasonably requested by Purchaser that are
necessary or desirable to permit the Purchaser to have available to it following
the Closing the benefits (whether direct or indirect) of the insurance policies
maintained by the Seller with respect to the Businesses which are currently in
force.
28
<PAGE>
6.12 TRANSITION MATTERS. For a period of six months following the
Closing Date, the Seller will provide certain services and make available
certain employees to the extent (if any) such services are provided to or such
employees perform services for the Businesses as conducted since December 31,
1995, provided that Seller shall not be required to make available any employees
who leave its employ or to provide the services previously provided by them, nor
shall Seller be required to make available any individual employee for more than
20 hours in any one calendar month. Purchaser for the same period shall make
available to Seller the services of Ernest Barnes for Seller's non-Division
environmental consultation (assuming he remains in Purchaser's employ), provided
that in no event shall Ernest Barnes spend more than 20 hours per calendar month
providing services pursuant to this Section 6.12.
6.13 USE OF TRADE NAMES. Purchaser agrees to abandon use by the
Businesses of the Excluded Proprietary Rights, and Seller agrees to abandon use
of the term "UNARCO," as promptly as practicable after the Closing, and in any
event by 60 days after the Closing.
6.14 LOGO. At the Closing, the parties will enter into a mutually
agreeable license agreement pursuant to which the Seller shall (i) grant to the
Purchaser a non-exclusive, perpetual, royalty-free license to use the logo set
forth on Schedule 1.2.3 hereto (the "Logo") and (ii) agree to transfer without
additional compensation all rights to the Logo to the Purchaser at such time as
the Seller ceases to use the Logo. Seller agrees that from the date hereof it
will not grant to any party, other than the Purchaser or an affiliate of the
Purchaser, any rights in or to the Logo, except that Seller may, if insisted
upon by the buyer of its Home Products division, grant such buyer a
non-exclusive license to use the Logo only for purposes of marketing sinks.
6.15 NOTICE OF UNAVAILABILITY OF FINANCING. If, at any time after July
31, 1996, the Purchaser concludes in good faith that it will not be able to
obtain the financing necessary to consummate the transaction contemplated herein
on or prior to August 31, 1996, the Purchaser shall notify the Seller
immediately of its inability to obtain such financing (the "Notice of
Unavailability of Financing").
6.16 NONCOMPETITION.
6.16.1 For the purposes of this Section 6.16, the following
definitions shall apply:
6.16.1.1 "Company Activities" shall mean, with respect to the
Seller and each of its affiliates, the manufacture and sale of
shopping carts, luggage carts, display systems, stocking equipment,
food handling systems and modular shelving.
6.16.1.2 "Confidential Information" shall mean any data or
information of the Businesses, the Seller or any of its affiliates,
other than Trade Secrets, which is valuable to the operation of the
Businesses and not generally known to competitors.
29
<PAGE>
6.16.1.3 "Noncompete Period" or "Nonsolicitation Period"
shall mean, with respect to the Seller and each of its affiliates,
the period beginning the date hereof and continuing for a period of
five years from the Closing Date.
6.16.1.4 The term "Territory" as used herein shall mean North
America, South America, Europe and Asia.
6.16.1.5 "Trade Secrets" shall mean information relating to
the Businesses, including, but not limited to, technical or
nontechnical data, a formula, pattern, compilation, program,
including, without limitation, computer software and related source
codes, device, method, technique, drawing, process, financial data,
financial plan, product plan, list of actual or potential customers
or suppliers, or other information similar to any of the foregoing,
which derives economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper
means by, other persons who can derive economic value from its
disclosure or use.
6.16.2 The Seller and each of its affiliates shall hold in
confidence at all times after the date hereof all Trade Secrets, and shall
not disclose, publish or make use of Trade Secrets at any time after the
date hereof without the prior written consent of the Purchaser. Nothing in
this Agreement shall diminish the rights of the Purchaser regarding the
protection of Trade Secrets and other intellectual property pursuant to
applicable law.
6.16.3 The Seller and each of its affiliates hereby agree that
during the Noncompete Period the Seller and each of its affiliates shall
hold in confidence all Confidential Information and will not disclose,
publish or make use of Confidential Information without the prior written
consent of the Purchaser.
6.16.4 The Seller and each of its affiliates hereby acknowledge
that the Businesses conduct Company Activities throughout the Territory.
The Seller and each of its affiliates acknowledge that to protect
adequately the interest of the Purchaser in the Businesses, it is essential
that any noncompete covenant with respect thereto cover all Company
Activities and the entire Territory. The Seller and each of its affiliates
hereby agree that the Seller and its affiliates shall not, during the
Noncompete Period, in any manner directly or by assisting others, engage
in, have an equity or profit interest in, or render services (of an
executive, marketing, manufacturing, research and development,
administrative, financial or consulting nature) to any business that
conducts any of the Company Activities in the Territory.
30
<PAGE>
6.16.5 If a judicial or arbitral determination is made that any of
the provisions of this Section 6.16 constitutes an unreasonable or
otherwise unenforceable restriction against the Seller or any of its
affiliates, the provisions of this Section 6.16 shall be rendered void only
to the extent that such judicial or arbitral determination finds such
provisions to be unreasonable or otherwise unenforceable with respect to
the Seller or such affiliate. In this regard, the Seller and the Purchaser
hereby agree that any judicial authority construing this Agreement shall be
empowered to sever any portion of the Territory, any prohibited business
activity or any time period from the coverage of this Section 6.16 and to
apply the provisions of this Section 6.16 to the remaining portion of the
Territory, the remaining business activities and the remaining time period
not so severed by such judicial or arbitral authority. Moreover,
notwithstanding the fact that any provision of this Section 6.16 is
determined not to be specifically enforceable, the Purchaser shall
nevertheless be entitled to recover monetary damages as a result of the
breach of such provision by the Seller or any of its affiliates. The time
period during which the prohibitions set forth in this Section 6.16 shall
be tolled and suspended for a period equal to the aggregate time during
which the Seller or any of its affiliates violates such prohibitions in any
respect.
6.16.6 The Seller hereby agrees that any remedy at law for any
breach of the provisions contained in this Section 6.16 shall be inadequate
and that the Purchaser shall be entitled to injunctive relief in addition
to any other remedy the Purchaser might have under this Agreement.
6.17 OPTION. Seller grants to Purchaser the option to purchase all of
the issued and outstanding capital stock of Seller's wholly-owned subsidiary,
Folding Carrier Corporation ("FCC"), for a purchase price of $1.00. Such option
shall be exercisable at any time after the Closing until 60 days thereafter, and
if not exercised by Purchaser, Seller shall promptly cause FCC to change its
name to one consented to by Purchaser or to be dissolved.
7.0 CONDITIONS TO THE OBLIGATION OF THE PURCHASER
The obligation of the Purchaser to purchase the Purchased Assets shall be
subject to the fulfillment at or prior to the Closing Date of each of the
following conditions:
7.1 ACCURACY OF THE SELLER'S REPRESENTATIONS AND WARRANTIES AND
COMPLIANCE BY THE SELLER WITH ITS OBLIGATIONS. The representations and
warranties of the Seller contained in this Agreement shall have been true and
correct in all material respects at and as of the date hereof, and they shall be
true and correct in all material respects at and as of the Closing Date with the
same force and effect as though made at and as of that time. The Seller shall
have performed and complied in all material respects with all of its obligations
required by this Agreement to be performed or complied with at or prior to the
Closing Date. Seller shall have delivered to the Purchaser a certificate, dated
as of the Closing Date and signed by an executive
31
<PAGE>
officer of Seller, certifying that such representations and warranties are thus
true and correct in all material respects and that all such obligations have
been thus performed and complied with in all material respects.
7.2 CERTIFIED RESOLUTIONS. Seller shall have delivered to the Purchaser
copies of resolutions adopted by the board of directors and stockholders of
Seller authorizing the transactions contemplated by this Agreement, certified in
each case as of the Closing Date by a secretary or assistant secretary.
7.3 OPINION OF COUNSEL. The Purchaser and, upon request, each person
providing financing to the Purchaser in connection with the transaction
contemplated herein shall have received an opinion dated the Closing Date from
the general counsel for the Seller, in form and substance as set forth in
Exhibit B attached hereto.
7.4 RECEIPT OF NECESSARY CONSENTS. All required consents, landlord
estoppel letters or approvals of third parties set forth in Schedule 7.4
necessary to convey to Purchaser all of the Purchased Assets as contemplated by
this Agreement, shall have been obtained and shown by written evidence
reasonably satisfactory to the Purchaser; provided, however, that if Seller is
unable to obtain any such consents or approvals on reasonable commercial terms
by the Closing Date, this condition shall be satisfied if Seller, by acting as
agent for Purchaser or participating in any other reasonable and lawful
arrangement, is able to put the Purchaser in the same position in all material
respects as if such consents or approvals had been obtained.
7.5 TITLE INSURANCE. Purchaser shall have received a binder for the
issuance of an ALTA (Form 1992) owner's title insurance policies (with costs to
be shared equally by Purchaser and Seller) with respect to the Purchased Real
Estate, subject only to those items set out in Schedule 4.5 and without
exception for the standard exceptions and the creditors' rights exceptions in
the policy.
7.6 NO ADVERSE ORDER. There shall not be any order of any court
restraining, prohibiting or invalidating the sale of the Purchased Assets to the
Purchaser or any other transaction contemplated hereby, or materially and
adversely affecting the right of the Purchaser to own, operate or control the
Purchased Assets.
7.7 NO MATERIAL ADVERSE CHANGE. Between the date of this Agreement and
the Closing, there shall not have been (nor shall the Purchaser have become
aware of) any event or condition resulting in, or which could reasonably be
expected to result in, a Material Adverse Effect.
7.8 AVAILABILITY OF FINANCING. No event or condition, outside the
control of Purchaser using all reasonable efforts, shall have occurred which
prevents Purchaser from obtaining the debt financing necessary for it to
consummate the transactions contemplated herein.
7.9 PHYSICAL CAPACITY OF RUSSELL BEGLEY. Russell Begley, President of
the Division, who has been advised to undergo a heart valve procedure, shall be
physically capable of performing his normal duties for the Businesses as of the
Closing, or, if not then so capable, shall
33
<PAGE>
be reasonably expected to be so capable within 45 days after the Closing.
Any dispute between the parties concerning the physical capability or
expected physical capability of Russell Begley shall be determined by his
personal physician, whose determination shall be final and binding on the
parties.
8.0 CONDITIONS TO OBLIGATIONS OF THE SELLER
The obligations of the Seller to sell the Purchased Assets shall be subject
to the fulfillment at or prior to the Closing Date of each of the following
condi
tions:
8.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH
OBLIGATIONS. The representations and warranties of Purchaser contained in this
Agreement shall have been true and correct in all material respects at and as of
the date hereof, and they shall be true and correct in all material respects at
and as of the Closing Date with the same force and effect as though made at and
as of that time. Purchaser shall have performed and complied in all material
respects with all of its obligations required by this Agreement to be performed
or complied with at or prior to the Closing Date. Purchaser shall have
delivered to the Seller a certificate, dated as of the Closing Date and signed
by an executive officer, certifying that such representations and warranties are
true and correct in all material respects and that all such obligations have
been thus performed and complied with in all material respects.
8.2 OPINION OF COUNSEL. The Seller shall have received an opinion,
dated the Closing Date, from King & Spalding, counsel for Purchaser, in form and
substance as set forth in Exhibit C attached hereto.
8.3 CERTIFIED RESOLUTIONS. Purchaser shall have delivered to the Seller
a copy of a resolution adopted by its general partner authorizing the
transactions contemplated by this Agreement, certified as of the Closing Date by
its secretary or assistant secretary.
8.4 NO ADVERSE ORDER. There shall not be any order of any court
restraining, prohibiting or invalidating the sale of the Purchased Assets to the
Purchaser or any other transaction contemplated hereby.
9.0 CERTAIN ACTIONS AFTER THE CLOSING
9.1 PURCHASER TO ACT AS AGENT FOR SELLER. This Agreement shall not
constitute an agreement to assign any claim, contract, license, lease,
commitment, sales order or purchase order if any attempted assignment of the
same without the consent of the other party thereto would constitute a breach
thereof or in any way affect the rights of the Seller thereunder. If such
consent is not obtained or if any attempted assignment would be ineffective or
would affect Seller's rights thereunder so that the Purchaser would not in fact
receive all such rights, then the Purchaser shall act as the agent for Seller in
order to obtain for the Purchaser the benefits thereunder.
33
<PAGE>
9.2 PURCHASER APPOINTED ATTORNEY FOR SELLER. Effective at the Closing
Date, the Seller hereby constitutes and appoints the Purchaser, its successors
and assigns, the true and lawful attorney of Seller, in the name of either the
Purchaser or Seller (as the Purchaser shall determine in its sole discretion)
but for the benefit and at the expense of the Purchaser (except as otherwise
herein provided), (i) to institute and prosecute all proceedings which the
Purchaser may deem proper in order to collect, assert or enforce any claim,
right or title of any kind in or to the Purchased Assets as provided for in this
Agreement; (ii) to defend or compromise any and all actions, suits or
proceedings in respect of any of the Purchased Assets, and to do all such acts
and things in relation thereto as the Purchaser shall deem advisable; and (iii)
to take all action which the Purchaser may reasonably deem proper in order to
provide for the Purchaser the benefits under any of the Purchased Assets where
any required consent of another party to the sale or assignment thereof to the
Purchaser pursuant to this Agreement shall not have been obtained. The
Purchaser shall be entitled to retain for its own account any amounts collected
pursuant to the foregoing powers, including any amounts payable as interest in
respect thereof.
10.0 PRODUCT WARRANTY AND LIABILITY CLAIMS
10.1 PRODUCT WARRANTY AND LIABILITY CLAIMS; COOPERATION IN
LITIGATION. As to any product warranty or liability claims asserted against
Purchaser or Seller for products of any of the Businesses shipped after the
Closing, Purchaser shall be fully responsible for their defense and resolution.
As to product warranty and liability claims for products of any of the
Businesses shipped before the Closing and first asserted against Purchaser or
Seller after the Closing, Purchaser shall be responsible for the first $5,000 of
costs of defense and resolution of each such claim, and Seller shall be
responsible for the remainder of such costs; as to such claims first asserted
before the Closing, Seller shall be solely responsible. Purchaser and Seller
shall each cooperate with the other in the defense of any such action and in the
prosecution or defense of any other actions affecting the Businesses to the
extent reasonably so requested.
11.0 INDEMNIFICATION
11.1 INDEMNIFICATION OBLIGATIONS OF THE SELLER. The Seller shall
indemnify, defend and hold harmless the Purchaser and its subsidiaries and
affiliates, each of their respective officers, directors, employees, agents and
representatives and each of the heirs, executors, successors and assigns of any
of the foregoing (collectively, the "Purchaser Indemnified Parties") from,
against and in respect of any and all claims, liabilities, obligations, losses,
costs, expenses, penalties, fines and other judgments (at equity or at law) and
damages whenever arising or incurred (including, without limitation, amounts
paid in settlement, costs of investigation and reasonable attorneys' fees and
expenses) arising out of or relating to:
11.1.1 any liability or obligation of the Seller except the Assumed
Liabilities;
11.1.2 any liability arising from the conduct of the Businesses
prior to the Closing, except the Assumed Liabilities;
34
<PAGE>
11.1.3 any breach or inaccuracy of any representation or warranty
made by the Seller in this Agreement;
11.1.4 any breach of any covenant, agreement or undertaking made by
the Seller in this Agreement;
11.1.5 any liability or obligation resulting from (i) any
violation of or noncompliance with any Environmental Law arising from or
related to the operation of the Businesses prior to the Closing, (ii) the
presence of any pollutants, contaminants, petroleum or hazardous or toxic
wastes, substances or materials on, in, under, about or migrating from the
Purchased Real Estate or the Purchased Leasehold Premises prior to the
Closing, and (iii) the off-site disposal or release by the Businesses of
any pollutants, contaminants, petroleum or hazardous or toxic wastes,
substances or materials prior to the Closing; or
11.1.6 any fraud, willful misconduct, bad faith or intentional
breach of any representation, warranty, covenant, agreement or undertaking
made by the Seller or any of its affiliates or subsidiaries in this
Agreement.
The claims, liabilities, obligations, losses, costs, expenses, penalties, fines
and damages of the Purchaser Indemnified Parties described in this Section 11.1
as to which the Purchaser Indemnified Parties are entitled to indemnification
are hereinafter collectively referred to as "Purchaser Losses."
11.2 INDEMNIFICATION OBLIGATIONS OF THE PURCHASER. The Purchaser shall
indemnify and hold harmless the Seller and its subsidiaries and affiliates, each
of their respective officers, directors, employees, agents and representatives
and each of the heirs, executors, successors and assigns of any of the foregoing
(collectively, the "Seller Indemnified Parties") from, against and in respect of
any and all claims, liabilities, obligations, losses, costs, expenses,
penalties, fines and other judgments (at equity or at law) and damages whenever
arising or incurred (including, without limitation, amounts paid in settlement,
costs of investigation and reasonable attorneys' fees and expenses) arising out
of or relating to:
11.2.1 any of the Assumed Liabilities;
11.2.2 any liability arising from the operation of the Businesses
after the Closing (except for Excluded Liabilities or to the extent
resulting directly from facts or circumstances for which the Purchaser is
entitled to indemnification from the Seller pursuant to Section 11.1);
11.2.3 any breach or inaccuracy of any representation or warranty
made by the Purchaser in this Agreement;
11.2.4 any breach of any covenant, agreement or undertaking made by
the Purchaser in this Agreement; or
35
<PAGE>
11.2.5 any fraud, willful misconduct, bad faith or intentional
breach of any representation, warranty, covenant, agreement or undertaking
made by the Purchaser in this Agreement.
The claims, liabilities, obligations, losses, costs, expenses, penalties,
fines and damages of the Seller Indemnified Parties described in this Section
11.2 as to which the Seller Indemnified Parties are entitled to indemnification
are hereinafter collectively referred to as "Seller Losses."
11.3 REMEDIES CUMULATIVE. Subject only to the express limitations set
forth in this Agreement, the remedies provided herein shall be cumulative, and
shall not preclude the Seller or the Purchaser as the indemnified party or
parties (the "Indemnified Party") from asserting any other rights or seeking any
other remedies against the other applicable party or parties (the "Indemnity
Obligor") to which it may otherwise be entitled by law.
11.4 SELLER BASKET. The Purchaser Indemnified Parties shall not make a
claim against the Seller for indemnification under Section 11.1.3 hereof (other
than a claim for a breach of a representation or warranty under Section 4.19
hereof, as contemplated below) for Purchaser Losses unless and until the
aggregate amount of the Purchaser Losses exceeds $250,000 (the "Seller Basket"),
in which event the Purchaser Indemnified Parties may claim indemnification for
all Purchaser Losses, to the extent the amount of such Purchaser Losses exceeds
the amount of the Seller Basket, provided that the Seller Basket shall not apply
with respect to Purchaser Losses arising from breaches of the representations
and warranties set forth in Sections 4.5, 4.6.2, 4.7 and 4.26 hereof. The
Purchaser Indemnified Parties shall not make a claim against Seller for
indemnification under Section 11.1.5 hereof, or for a breach of the
representation and warranty in Section 4.19 hereof, for Purchaser Losses
("Purchaser Environmental Losses") unless and until the aggregate amount of
Purchaser Environmental Losses exceeds $25,000, in which event the Purchaser
Indemnified Parties may claim indemnification for all Purchaser Environmental
Losses, to the extent the amount of such Purchaser Environmental Losses exceeds
$25,000. Such $25,000 threshold for Purchaser Environmental Losses shall not be
subtracted from the Seller Basket. The Purchaser Indemnified Parties may also
claim indemnification for Purchaser Environmental Losses without regard to the
$25,000 threshold to the extent they arise from the proposed citations which may
be issued by the Occupational Safety and Health Administration inspector based
on his June 13, 1996 visit to the Wagoner, Oklahoma facility of the Division, as
noted on Schedule 4.19 hereto.
11.5 PURCHASER BASKET. The Seller Indemnified Parties shall not make a
claim against the Purchaser for indemnification under Section 11.2.3 for Seller
Losses unless and until the aggregate amount of the Seller Losses exceeds
$250,000 (the "Purchaser Basket"), in which event the Seller Indemnified Parties
may claim indemnification for all Seller Losses, to the extent the amount of
such Seller Losses exceeds the amount of the Purchaser Basket, provided, that,
there shall be no Purchaser Basket for Seller Losses arising from breaches of
the representation set forth in Section 5.4 hereof.
11.6 SELLER LIMIT. In no event shall Seller be liable to Purchaser
Indemnified Parties for Purchaser Losses exceeding $41,000,000 in the aggregate.
36
<PAGE>
11.7 NOTICE OF CLAIM. The Indemnified Party shall promptly notify the
Indemnity Obligor in writing of any claim for recovery, specifying in reasonable
detail the nature of the Purchaser Loss or the Seller Loss (Purchaser Losses and
Seller Losses sometimes are referred to herein collectively as the "Losses"), as
the case may be, and, if known, the amount, or an estimate of the amount, of the
liability arising therefrom. If the Indemnified Party does not so notify the
Indemnity Obligor within 60 days of its discovery of a claim for recovery, the
obligation of the Indemnity Obligor shall be reduced by the amount of damages
actually suffered by it as a result of such late notice. The Indemnified Party
shall provide to such Indemnity Obligor as promptly as practicable thereafter
information and documentation reasonably requested by such Indemnity Obligor to
support and verify the claim asserted.
11.8 DEFENSE. If the facts pertaining to the Loss arise out of the claim
of any third party, or if there is any claim against a third party available by
virtue of the circumstance of the Loss, the Indemnity Obligor may, by giving
written notice to the Indemnified Party within 30 days following its receipt of
the notice of such claim, elect to assume the defense or the prosecution
thereof, including the employment of counsel or accountants, at its cost and
expense. The Indemnified Party shall have the right to employ counsel separate
from counsel employed by the Indemnity Obligor in any such action and to
participate therein, but the fees and expenses of such counsel employed by the
Indemnified Party shall be at its expense. The Indemnity Obligor shall not be
liable for any settlement of any such claim effected without its prior written
consent, which shall not be unreasonably withheld. Whether or not the Indemnity
Obligor chooses so to defend or prosecute such claim, all the parties hereto
shall cooperate in the defense or prosecution thereof and shall furnish such
records, information and testimony, and attend such conferences, discovery
proceedings, hearings, trials and appeals, as may be reasonably requested in
connection therewith. In the event of payment by the Indemnity Obligor to the
Indemnified Party in connection with any Purchaser Loss or Seller Loss subject
to indemnification pursuant to this Section 11.0 (collectively, "Indemnified
Matters," and individually, each an "Indemnified Matter") arising out of any
third-party claim, the Indemnity Obligor shall be subrogated to and shall stand
in the place of the Indemnified Party as to any events or circumstances in
respect of which the Indemnified Party may have any right or claim against such
third party relating to such Indemnified Matter. The Indemnified Party shall
cooperate with the Indemnity Obligor in any reasonable manner, and at the cost
and expense of the Indemnity Obligor, in prosecuting any subrogated right or
claim.
12.0 MISCELLANEOUS
12.1 BROKERS' COMMISSION. The Purchaser will indemnify and hold harmless
the Seller from the commission, fee or claim of any person, firm or corporation
employed or retained or claiming to be employed or retained by the Purchaser to
bring about, or to represent it in, the transactions contemplated hereby. The
Seller will indemnify and hold harmless the Purchaser
37
<PAGE>
from the commission, fee or claim of any person, firm or corporation employed or
retained or claiming to be employed or retained by the Seller to bring about, or
to represent them in, the transactions contemplated hereby.
12.2 AMENDMENT AND MODIFICATION. The parties hereto may amend, modify
and supplement this Agreement in such manner as may be agreed upon by them in
writing.
12.3 TERMINATION.
12.3.1 Anything to the contrary herein notwithstanding, this
Agreement may be terminated and the transactions contemplated hereby may be
abandoned:
12.3.1.1 by the mutual written consent of the parties hereto
at any time prior to the Closing Date;
12.3.1.2 by the Purchaser or the Seller at any time prior to
the Closing Date if there is an order of any court or other
governmental body restraining, prohibiting or invalidating the sale
of the Purchased Assets to the Purchaser or any other material
transaction contemplated hereby, or, in the case of the Purchaser,
which would materially and adversely affect the right of the
Purchaser to own, operate or control the Purchased Assets; or
12.3.1.3 by either party in the event of the material breach
by the other party of any provisions of this Agreement, which breach
is not remedied by the breaching party within 30 days after receipt
of notice thereof from the terminating party; or
12.3.1.4 by either party in the event that one or more
conditions to its closing is not capable of being satisfied in any
material respect on or prior to August 31, 1996; or
12.3.1.5 by Seller following receipt from the Purchaser of a
Notice of Financing Unavailability; or
12.3.1.6 by either party if the Closing has not taken place
by August 31, 1996.
If this Agreement is terminated pursuant to clauses 12.3.1.1 or 12.3.1.2 of this
paragraph 12.3.1, no party shall have any liability for any costs, expenses,
loss of anticipated profit or any further obligation for breach of warranty or
otherwise to any other party to this Agreement. Any termination of this
Agreement pursuant to clauses 12.3.1.3, 12.3.1.4, 12.3.1.5 or 12.3.1.6 of this
paragraph 12.3.1 shall be without prejudice to any other rights or remedies of
the respective parties.
12.4 BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors,
assigns, heirs and legal
38
<PAGE>
representatives. No rights or obligations hereunder may be assigned by a party
hereto without the prior written consent of the other party, provided that
Purchaser may assign its rights, but not its obligations, hereunder to a
majority-owned direct or indirect subsidiary of Purchaser without Seller's prior
written consent and may make a collateral assignment of its rights, but not its
obligations, hereunder to any person providing financing in connection with the
transaction contemplated herein.
12.5 ENTIRE AGREEMENT. This Agreement, the Exhibits and Schedules
attached hereto and the Confidentiality Agreement contain the entire agreement
of the parties hereto with respect to the purchase of the Purchased Assets and
the other transactions contemplated herein, and supersede all prior
understandings and agreements of the parties with respect to the subject matter
hereof. Any reference herein to this Agreement shall be deemed to include the
Schedules and Exhibits attached hereto.
12.6 HEADINGS. The descriptive headings in this Agreement are inserted
for convenience only and do not constitute a part of this Agreement.
12.7 EXECUTION IN COUNTERPART. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original.
12.8 NOTICES. Any notice, request, information or other document to be
given hereunder to any of the parties by any other party shall be in writing and
delivered to the parties at the following addresses (or to such other address as
a party may have specified by notice to the other party pursuant to this
provision):
If to Seller, addressed to:
UNR Industries, Inc.
332 South Michigan Avenue
Chicago, Illinois 60604
Attn: General Counsel
Fax: (312) 341-0349
with a copy to:
Bell, Boyd & Lloyd
Three First National Plaza
70 West Madison Street
Suite 3300
Chicago, Illinois 60602
Attn: John H. Bitner, Esq.
Fax: (312) 372-2098
39
<PAGE>
If to Purchaser, addressed to:
c/o Richards, L.L.C.
303 Peachtree Street, NE
Suite 4100
Atlanta, Georgia 30308
Attn: Mr. James C. Richards
Managing Director
Fax: (404) 572-7227
with a copy to:
King & Spalding
191 Peachtree Street, NE
Atlanta, Georgia 30303-1763
Attn: Mr. Michael J. Egan III
Fax: (404) 572-5145
Any such notice shall be deemed given (i) when receipted for by the party to
whom addressed, in the case of personal delivery; (ii) the next business day
following service by overnight mail or delivery service; (iii) the third
business day following the deposit in the U.S. mail, postage prepaid, registered
or certified mail, return receipt requested; or (iv) upon receipt of electronic
facsimile transmission, provided that a copy of such facsimile notice shall
simultaneously be sent to the address by certified or registered mail, return
receipt requested.
12.9 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware applicable to
contracts made and to be performed therein without regard to the conflicts of
laws principles thereof.
12.10 LIMITATION ON RIGHTS OF OTHER PERSONS. Nothing expressed or implied
in this Agreement is intended or shall be construed to confer upon or give any
person, firm, corporation or entity other than the parties hereto any rights or
remedies under or by reason of this Agreement or any transaction contemplated
hereby, except as herein otherwise provided.
12.11 SEVERABILITY. If any provision of this Agreement shall be held or
deemed to be, or shall in fact be, illegal, inoperative or unenforceable, the
same shall not affect any other provision contained herein, or render the same
invalid, inoperative or unenforceable to any extent whatsoever.
12.12 TERMINATION OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All of
the representations and warranties of the parties contained in this Agreement or
in any document or certificate delivered hereto shall survive the Closing and
the consummation of the transactions contemplated herein for the following
periods: (i) the representations and warranties contained in Sections 4.19 and
4.21, and the agreement to indemnify contained in Section 11.1.5, shall survive
for a period of three years following the Closing Date; (ii) the representations
and warranties
40
<PAGE>
contained in Sections 4.5, 4.6, 4.7 and 4.11 shall survive for an indefinite
period, except to the extent limited by law; and (iii) all other representations
and warranties contained herein shall survive for a period of one year following
the Closing Date. The agreements of the parties contained in Sections 6.3, 6.4,
6.6, 12.1, 12.9 and this Section 12.12 shall survive the termination of this
Agreement. All other representations, warranties, agreements and covenants in
or pursuant to this Agreement shall not survive the termination of this
Agreement.
12.13 ARBITRATION.
12.13.1 Any controversy, claim or question of interpretation
arising out of or relating to this Agreement or the breach thereof (other
than any dispute arising under Section 2.5) shall be finally settled by
arbitration in the City of Memphis, Tennessee under the then-effective
Commercial Arbitration Rules of the American Arbitration Association as
modified by this Agreement, and judgment on the award rendered by the
arbitrators may be entered in any court having jurisdiction. The award
rendered by the arbitrators shall be final and binding on the parties and
not subject to further appeal. Such arbitration can be initiated by
written notice by either party (the "Claimant") to the other party, which
notice shall identify the Claimant's selected arbitrator. The party
receiving such notice (the "Respondent") shall identify its arbitrator
within ten business days following its receipt of such notice. The
arbitrator selected by the Claimant and the arbitrator selected by the
Respondent shall, within ten business days of their appointment, select a
third neutral arbitrator. In the event that they are unable to do so,
either party may request the American Arbitration Association to appoint
the third neutral arbitrator. The arbitrators shall have the authority to
award any remedy or relief that a court in Delaware could order or grant,
including, without limitation, specific performance of any obligation
created under this Agreement, the issuance of injunctive or other
provisional relief, or the imposition of sanctions for abuse or frustration
of the arbitration process, but not the awarding of punitive damages. The
arbitration award will be in writing and specify the factual and legal
basis for the award.
12.13.2 It is the intent of the parties that any arbitration shall
be concluded as quickly as reasonably practicable. Unless the parties
otherwise agree, once commenced, the hearing on the disputed matters shall
be held four days a week until concluded with each hearing date to begin at
9:00 a.m. and to conclude at 5:00 p.m. The arbitrators shall use all
reasonable efforts to issue the final award or awards within a period of
five business days after closure of the proceedings. Failure of the
arbitrators to meet the time limits of this Section 12.13.2 shall not be a
basis for challenging the award.
12.13.3 The arbitrators shall instruct the non-prevailing party to
pay all costs of the proceedings, including the fees and expenses of the
arbitrators and the reasonable attorneys' fees and expenses of the
prevailing party. If the arbitrators determine that there is not a
prevailing party, each party shall be instructed to bear its own costs and
to pay one-half of the fees and expenses of the arbitrators.
41
<PAGE>
12.14 PURCHASER'S OPTION UPON MATERIAL CASUALTY LOSS. In the event that
the condition set forth in Section 7.7 shall not be satisfied as of the Closing
Date by reason of any damage, destruction or loss to or of any of the Purchased
Assets for which the Seller is insured, in addition to any other rights
conferred upon the Purchaser hereunder, the Purchaser shall have the right at
its sole option to elect to proceed with the Closing and to pay the full
Purchase Price for the Purchased Assets in the manner herein provided as if none
of such Purchased Assets had incurred any damage or loss and to receive from the
Seller payment or assignment of the full amount of all insurance proceeds with
respect to such loss.
12.15 CERTAIN DEFINITIONS. As used herein, the term "reasonable efforts"
means those commercially reasonable efforts which would be exerted by a business
enterprise to accomplish the desired result, short of the expenditure of funds
disproportionate to the benefit derived; and the term "affiliate" shall mean,
with respect to a person or entity, any other person or entity which, directly,
or indirectly or through one or more intermediaries, controls or is controlled
by, or is under common control with, the person or entity specified; the term
"Material Adverse Effect" shall mean a material adverse effect on the assets,
liabilities, working capital, financial condition or results of operations of
the Businesses, taken as a whole or on the ability of a party to legally and
validly consummate the transactions contemplated by this Agreement; the term
"control," when used with respect to any specified person, means the power to
direct the management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing; the term "person" means any individual, corporation, partnership,
joint venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
42
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
RICHARDS CAPITAL FUND, L.P.
By: Richards Managers, L.P., its
general partner, by Richards,
L.L.C., its general partner
By /s/ JAMES C. RICHARDS
---------------------------------
James C. Richards
Member
UNR INDUSTRIES, INC.
By /s/ T. A. GILDEHAUS
---------------------------------
Thomas A. Gildehaus
President
43
THREE FIRST NATIONAL PLAZA
70 WEST MADISON STREET, SUITE 3300
